Kaupthing Investigation Spreads into British Business World - The Reykjavik Grapevine

Kaupthing Investigation Spreads into British Business World

Published June 7, 2010

The Serious Fraud Office of Britain is currently investigating Kaupthing, and is now moving its attention into allegations of market manipulation committed by some of the bank’s top clients, including figures in Britain’s finance world.
The Guardian reports that investigators are focussing in particular on Deutsche Bank and their part in a scheme to falsely booster investor confidence in the bank at a time when it was on the brink of collapse.
The scheme essentially amounted to Kaupthing asking some of its more high-profile and well-trusted clients to take part, by loaning key clients roughly €500m for the purpose of selling credit default swaps on Kaupthing itself. This created, to all outside observers, a false appearance of stability for the bank. When the bank collapsed, this money remained outside of Iceland.
For the full story, read the Guardian’s article here.

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