Reykjavik District Court has today passed sentence on the first case by the special prosecutor into the banking crash. Baldur Gudlaugsson has been sentenced to two years in prison for insider trading.

Baldue Gudlaugsson, former permanent secretary at the Ministry of Finance, committed serious crimes, the judge said;adding that his sentence is particularly harsh because he abused his position as a civil servant.

Gudlaugsson was found guilty on six charges, Visir.is reports. He was found not guilty on one charge and partially absolved of the remaining two.

He sold his shares in Landsbanki on the 17th and 18th September 2008, immediately before the bank’s fall — apparently based on inside knowledge.

The court has seized the ISK 192 million (EUR 1.2 million) profit from the share sale, which Gudlaugsson has been keeping in an account at Arion Bank. He will also have to pay his lawyer a further ISK 4.5 million in charges.

This is the first case brought by special prosecutor Olafur Thor Hauksson to get to the sentencing stage. Hauksson is currently in Luxembourg investigating the fall of Kaupthing Bank.