2 ex-Landsbanki executives arrested in Iceland

[January 14, 2011]  REYKJAVIK, Iceland (AP) -- Two former senior executives with Iceland's failed Landsbanki bank have been arrested over allegations of market manipulation, the special prosecutor's office said Friday.

Prosecutor Olafur Hauksson said he had asked that ex-Landsbanki chief executive Sigurjon Arnson and former head of corporate finance Ivar Gudjonsson be detained in connection with investigation into the collapse of the institution, one of several Icelandic banks that failed in 2008 under the weight of enormous debts racked up during the tiny North Atlantic nation's boom.

The two were in custody Friday, and a judge at Reykjavik's district court was due to rule on their continued detention later. Five other Landsbanki executives also are wanted for questioning, including Halldor Kristjansson, the who was Arnson's co-chief executive.

Kristjansson was expected back in Iceland from Canada in the coming days.

Icelanders are still struggling to emerge from the banking collapse that wrecked their economy, sent their currency into a tailspin, and forced out the country's then-leaders.

Hauksson was appointed by the Iceland's post-crisis government to investigate whether there was any criminal activity in the lead up to the crash.

Last year, the former chief executive of collapsed bank Kaupthing became the first high-profile banker to be detained in connection with his investigation.

[Associated Press]

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