After a 15-year investigation, three former executives of Kaupthing Bank Luxembourg on Wednesday were fined €75,000 for their role in the insolvency of the Grand Duchy-based subsidiary of the Icelandic bank Kaupþing.
The District Court of Luxembourg handed down a so-called jugement sur accord, the judicial approval of a plea bargain, the prosecutor’s office said in a press release. It marks the end of one of the most complex financial criminal proceedings in Luxembourg in recent years.
Investigations began in 2010 following complaints from the national financial supervisory authority, the CSSF. The focus was on dubious financial transactions shortly before the collapse of the Luxembourg subsidiary of the Icelandic bank in October 2008 during the Great Financial Crisis.
Assets were shifted between the parent company, the Luxembourg branch and an offshore company, presumably to get rid of illiquid or worthless securities during the market panic, according to the prosecutor’s office. Transactions in question were subsequently justified with backdated documents, the office said.
The judiciary accused the defendants of forgery, breach of trust, embezzlement and money laundering. The accused struck a deal with the prosecution this summer, which was ratified on Wednesday.
The investigation was characterised by international cooperation, particularly with Iceland, and included over 30 hearings, numerous investigation reports and international requests for legal assistance.
In the official statement, the judicial authorities thanked their Icelandic partners for their “constant and effective cooperation”.
In criminal law, jugement sur accord refers to a procedure introduced in Luxembourg in 2015 that allows for a plea bargaining-like agreement between the public prosecutor and the accused. This agreement includes an admission of guilt, agreed-upon sanctions and approval by the criminal court.
(This article was published by the Luxemburger Wort. Machine translated, with editing and adaptation by Alex Stevensson.)
