In September 2010, Geir became the first Icelandic minister to be indicted for misconduct in office, and stood trial before the Landsdómur, a special court for such cases.

The end of Geir's tenure as prime minister was marked by the dramatic financial crisis which engulfed Iceland from October 2008.

In less than a week, the country's three major commercial banks (Glitnir, Landsbanki and Kaupthing) all had to be taken over by the government as they were unable to roll over their loans.

Geir was strongly criticised in the April 2010 report of the Special Investigative Commission into the financial collapse, being accused of "negligence" along with three other ministers of his government.

[9][10] On 28 September 2010, Iceland's parliament, Althing, voted 33–30 to indict Geir, but not the other ministers, on charges of negligence in office at a session.

The convention declared its unequivocal support for Mr. Haarde while noting the serious precedent the parliament had set with its decision to prosecute.

[17][18] Due to his age, no previous criminal record and the acquittal of the most serious charges, Haarde was not sentenced in the case, and the Icelandic State paid his legal expenses.