Icelandic bank ex-CEO sentenced to jail over manipulation pre - 2008 crisis

REYKJAVIK (Reuters) - The former chief executive of Landsbanki, one of three banks that racked up $75 billion (48 billion pounds) in debt before collapsing and crashing the economy in 2008, was sentenced to one year in jail on Wednesday for market manipulation.

Sigurjon Arnason was convicted of manipulating the bank's share price and deceiving investors, creditors and the authorities in the dying days of the bank between Sept. 29 and Oct. 3, 2008.

The Reykjavik District Court said nine months of Arnason's sentence were suspended. Ivar Gudjonsson, former director of proprietary trading, and Julius Heidarsson, a former broker, were also convicted and received nine-month sentences, six of which were suspended. All pleaded innocent to the charges.

"This sentence is a big surprise to me as I did not nothing wrong," Sigurjon Arnason told Reuters after the sentencing, adding that he and his attorney had not yet decided whether to appeal to the supreme court.

The fallout from the 2008 crisis continues to this day in the north Atlantic island.

Earlier this week Landsbanki and its successor Landsbankinn agreed to extend a deadline to restructure bonds to the end of the year. If a deal is struck, it will help the government lift capital controls which were imposed due to the crisis.

(Reporting by Robert Robertsson; writing by Sabina Zawadzki and Ralph Boulton)