Bloomberg News

Ex-Glitnir Chief Larus Welding Said to Be Arrested in Iceland

December 01, 2011

Dec. 1 (Bloomberg) -- Ex-Glitnir Bank hf Chief Executive Officer Larus Welding was one of the people arrested in an investigation involving the failed lender, a person familiar with the matter said.

Iceland’s special prosecutor said in a statement yesterday that officials searched houses and arrested an unspecified number of people in an investigation into loans and share transactions at Glitnir. Welding was among those arrested, said the person, who didn’t want to be identified because the matter wasn’t public.

The arrests involved matters related to Glitnir’s proprietary trading of shares issued by the bank and purchases and arrangements related to shares issued by FL Group hf, according to a statement from the special prosecutor’s office today. The investigation also concerns Reykjavik-based Glitnir’s share issues in 2007 and 2008 and transactions related to future contracts, prosecutors said.

Glitnir was the first of Iceland’s biggest banks to fail in October 2008, precipitating the collapse of the island’s financial system and sending the krona down as much as 80 percent against the euro on the offshore market.

Ragnar H. Hall, Welding’s lawyer, didn’t immediately return phone calls after regular business hours yesterday in Iceland seeking comment on the arrest.

--Editors: Michael Hytha, John Simpson

To contact the reporter on this story: Omar R. Valdimarsson in Reykjavik at valdimarsson@bloomberg.net

To contact the editor responsible for this story: Jonas Bergman at jbergman@bloomberg.net


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