Landsbanki investigation making “great strides” in Luxembourg

Photo: Charles Caratini

A Luxembourg investigation into financial products sold by Icelandic bank Landsbanki before its collapse is making “great strides”, according to Luxembourg's Justice Minister.

Responding to a parliamentary question by CSV MP Serge Wilmes, Ms Modert said that there were currently two cases, relating to different aspects of criminal conduct regarding the Icelandic banks were being treated by the Luxembourg authorities.

“In one case, the deciding judge is making great strides,” she said, adding that in order not to jeopardize the investigation, the State Attorney was unable to provide further details on the results already achieved.

When Landsbanki collapsed in 2008, scores of investors involved in the Equity Release mortgage scheme obtained through the bank,  lost their homes and their livelihoods.

Their lawyers claim that the financial product was a scam and have attempted to dispute the decision of the Luxembourg liquidator to hear the case in court.

A 24-page report, released by the victims' legal representatives lawyers, Mr Benjamin Bodig of Diekirch and Me Bernard Maingain of Brussels, calls the case “the most important affair concerning banking delinquancy treated at a judicial level within the EU.”

The report also includes a study commissioned from university professor Eric Briys, which suggests the scheme was not as transparent as it appeared. He wrote: "They presented ERP products in the innocuous form of investment savings tailored to the needs of the target audience. The aim was different: they ultimately wanted to capture the mortgage and securities portfolio to hedge receivables at the end of the operation.”

Translated from an article by Thierry Labro