Failed bank exec arrested

The former chief executive of the
collapsed Icelandic bank Kaupthing has been arrested, authorities say.

Hreidar Mar Sigurdsson is suspected
of embezzlement, trading irregularities, and other breaches of banking laws,
the special prosecutor’s office has said.

It is the first high-profile arrest
since the country’s financial collapse in 2008.

Mr Sigurdsson is being held by
police until a bail hearing on Friday at the Reykjavik District Court.

Kaupthing, once Iceland’s biggest
bank, collapsed under a mountain of debt at the height of the country’s banking

It was taken over by the government
in October 2008, along with Iceland’s two other biggest banks, Landsbanki and

Prosecutor Olafur Hauksson said Mr
Sigurdsson was suspected of falsifying documents, embezzlement, breach of
trading laws, market manipulation, and other laws.

Mr Hauksson was appointed by
Iceland’s post-crisis government to investigate any criminal activity in the
lead up to the crash that has crippled Iceland’s economy.

Britain’s Serious Fraud Office is
carrying out its own investigation into suspected fraud at Kaupthing, with a
focus on the bank’s efforts to attract British investors to its “high
yield” deposit account, Kaupthing Edge.