It did not start too well: after Althing passed an Act in December 2008 to set up an office of a special prosecutor to investigate possible fraud related to the banking collapse no one applied. Finally, Ólafur Þór Hauksson stepped forward, a sheriff (called “sýslumaður” in Icelandic) from Akranes, the village on the other side of the gulf from Reykjavík.
Though having no previous expertise in Iceland to build on, the OSP has built up the expertise and know-how in investigating fraud such as market manipulation, insider trading, embezzlement and breach of fiduciary duty. So far, six OSP cases have found their way all the way to the Icelandic Supreme Court: five ended with sentencing, one with acquittal.
The Icelandic decision to investigate possible fraud within the banks has been much noticed around the world where financial institutions often seem like holy cows, too powerful to investigate and bankers too important to jail. Examiner Anton Valukas who led the investigation into Lehman Brothers’ demise pointed out certain accounting practice, so called Repo 105, which according to the report seemed to have the sole purpose of balance sheet manipulation (see here on Valukas and the SIC report). Valukas has later clearly expressed bafflement that no charges have been filed regarding Lehman. – In Iceland, irregularities regarding the operations of the banks are being investigated and bankers prosecuted as well as other high-flying businessmen.
*Read the entire post here.