REYKJAVIK (Reuters) - Two former chief executives of collapsed Icelandic bank Landsbanki have been indicted by the country's special prosecutor for putting the bank at risk by letting it guarantee loans without sufficient insurance.
Iceland's financial system crashed during the credit crunch that followed the collapse of Lehman Brothers in 2008, and the country appointed a special prosecutor to investigate whether bank employees were complicit in the crisis. A handful of former bank executives have so far been prosecuted and found guilty.
In the indictment, Sigurjon Arnason and Elin Sigfusdottir are charged with jeopardizing Landsbanki by letting it guarantee loans by peer Kaupthing Bank to two companies registered in Panama before the crisis for a total of 13.6 billion Icelandic crowns, or about $200 million at the time.
The indictment states that without sufficient insurance this was a "major violation" of their positions.
Arnason denied any wrongdoing but declined further comment. Sigfusdottir could not be reached for comment.
Arnason was CEO from 2003 to October 2008. Sigfusdottir was head of the bank from October 2008 to January 2009 and managing director of corporate finance before that.
The case will be filed in the Reykjavik District Court on February 3, with the court then deciding whether to proceed.
Last year, Iceland's special prosecutor issued indictments against Arnason and his joint Landsbanki CEO Halldor Kristjansson, as well as four other former Landsbanki employees, for alleged manipulation of Landsbanki's share price in the run up to the collapse of the banking system in 2008.
Arnason and the other defendants in this case have pleaded not guilty.
Iceland has taken a tough line against financiers who oversaw a credit-fuelled spending spree across Europe that saw the country's banks buy up assets such as UK fund manager Singer & Friedlander and broker Teather & Greenwood.
Last month, the Reykjavik District Court handed down jail sentences of 5 years and 5-1/2 years respectively to the former CEO and former chairman of Kaupthing Bank - the heaviest sentences ever given in Iceland for economic fraud.
CEO Hreidar Mar Sigurdsson, Chairman Sigurdur Einarsson and two others were found guilty of market manipulation in relation to Sheik Mohammed Bin Khalifa Al-Thani of Qatar's acquisition of more than five percent of shares in Kaupthing Bank shortly before it collapsed in the autumn of 2008.
(Reporting by Robert Robertsson; Editing by Mark Potter)