The Small Club of Bank Executives Charged With Crisis-Era Crimes Just Got Bigger
Posted June 21, 2018 3:48 p.m. EDT
In a Dublin courtroom earlier this month, David Drumm, the former CEO of Anglo Irish Bank, joined an exclusive club.
He became the latest senior banking executive to be convicted of a crime tied to the 2008 global financial crisis.
Drumm was found guilty of fraud and false accounting in connection with a plan to falsely convince people that Anglo Irish was financially healthier than it really was. On Wednesday, he was sentenced to six years in prison — two fewer years than the base term for such crimes, but still necessary for what the judge called “grossly reprehensible behavior.”
But Drumm is a rarity. Few of the top executives that helped push the global economy to the brink have been convicted of crimes in the decade since the financial crisis.
Here’s a look at some of those who were charged with crimes related to the downturn in 2008. (It’s not a long list.)
The former global head of structured credit for Credit Suisse, Serageldin pleaded guilty in 2013 of lying about the value of the mortgage-backed assets, which later soured to the tune of more than $100 million. He was sentenced to 30 months in prison.
Here’s what he said of his sentence in a 2014 article in the New York Times Magazine.:
“I don’t feel angry,” he told me in early winter. “I made a mistake. I take responsibility. I’m ready to pay my debt to society.”
Icelandic banking executives
More than perhaps any other country, Iceland pursued criminal cases against senior figures in its banking industry, which crumbled under the weight of billions of dollars worth of debt. Many of the executives were accused — and convicted — of market manipulation and fraud tied to efforts to prop up the stock prices of their banks.
These banks saw the following senior executives convicted:
Kaupthing: Sigurdur Einarsson, its former chairman; Hreidar Mar Sigurdsson, its onetime CEO; Magnus Gudmundsson, once the head of its Luxembourg division; and Olafur Olafsson, one of its biggest shareholders.
Glitnir: Larus Welding, the firm’s former CEO, and Gudmundur Hjaltason, its former head of finance.
Landsbanki: Sigurjon Arnason, its former CEO.
And, for something slightly different ...
Several former Barclays executives — including John Varley, the British bank’s former CEO; Roger Jenkins, a former top investment banker; Tom Kalaris, the onetime head of its wealth unit; and Richard Boath, the former head of its financial institutions group — face individual criminal charges for their role in a 2008 effort to raise money to shore up the lender.
Barclays raised billions of pounds from Qatar and other investors. But the men were charged with conspiracy to commit fraud in relation to that fundraising activity, amid allegations that improper side deals were struck alongside those capital raises. (Charges against the firm itself were dismissed last month.)