The eternal recurrence of financial corruption: contemporary lessons from Ivar Kreuger, the crooked financier who shook the 1930s.

• Author: Doherty, Brian
• Position: The Match King: Ivar Kreuger, the Financial Genius Behind a Century of Wall Street Scandals, by Frank Partnoy - Book review

The Match King: Ivar Kreuger, the Financial Genius Behind a Century of Wall Street Scandals, by Frank Partnoy, New York: Public Affairs, 272 pages, $26.95

WITH TURMOIL in the financial markets battering the United States, Frank Partnoy picked an apropos time to look back at Ivar Kreuger, a mighty industrialist and financier from a bygone age. The tale of Kreuger's rise and fall, featuring exotic financial instruments and Wall Street shenanigans, is full of lessons that can be applied to our current predicament. Partnoy, a professor of law and finance at the University of San Diego, tells that story engagingly in The Match King: Ivar Kreuger, the Financial Genius Behind a Century of Wall Street Scandals.

Kreuger, Partnoy argues, was the proximate cause of "the securities laws that govern today's markets" It wasn't the Great Depression that prompted the creation of the Securities and Exchange Commission; it was the disgraceful fall of this mysterious, moneyed Swede. In the early 1930s, shares of Kreuger's interlocking international companies were owned by more people in America and around the world than those of any other business.

Kreuger came from a working-class background and got his start in the building trades. Partnoy claims Kreuger invented the practice of promising completion of a project by a specific date in exchange for a bonus. Later, the humble safety match (which ignites only if struck against its own box rather than against any old surface) became the linchpin of the Swede's sprawling international empire; hence he was known as the Match King.

That empire made Kreuger as famous as Charles Lindbergh, a consort to Greta Garbo, a man filled with so much grandiosity that he couldn't leave well enough alone when the going got tough. In that last characteristic, he resembled the government that reacted to his frauds by reshaping its financial regulatory system.

Kreuger was a man of great imagiation, great ambition, and, at least until the end, great self-control. He was a friend and adviser to both Herbert Hoover and King Gustav of Sweden. Though a self-made man, Kreuger won the hearts (and cash flow) of snooty bluebloods in the highest echelons of Boston banking. Coming from nothing, he took special delight in being a thorn in the side of such icons of old wealth and power as the Morgan banking interests. His life story inspired Ayn Rand's 1934 mystery play of a Swedish tycoon's death, The Night of January 16th. While Rand did not...