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Great story badly written
A "forgotten" but very interesting story, which would have deserved a better hand in writing. If you manage to overlook that the book is very badly written (it seems that the professor of finance who wrote the book has received his degree by replying to junk mail), then this is a fantastic real life story which finds its relevance in the current financial turmoil. I highly recommend the story, but not the book.
Hero and Villain 
Empire
Ivar Kreuger's industrial empire was mainly built on national monopolies for match sales.
At the zenith of his business career, his holding companies Swedish Match and Kreuger-Toll owned 225 subsidiaries covering banking, mining (Boliden), railway, timber, paper, cellulose, iron ore, real estate, telephone (L.M. Ericsson) and film production (Greta Gustafson Garbo) and distribution interests, together with 75 % of the world's match manufacturing and 24 national match sales monopolies.
All these investments were controlled AND managed by one man: Ivar Kreuger.
Business strategy
His strategy was based on horizontal and vertical integration, but also on briberies and the use of tax havens (he bribed all 13 members of the Liechtenstein parliament!).
Financial strategy
To attract new financial resources he distributed extremely fat dividends, thereby sometimes using his own version of a Ponzi scheme: continuing to pay dividends with newly raised cash.
The financial capacity of his home country, Sweden, was far too small for his business ambitions and he turned to Wall Street to tap new capital.
He was a real financial innovator, creating A and B (1/1000 of one vote) as well as preferred shares in order to keep control of all his interests.
Reporting
Ivar Kreuger used now very well known accounting subterfuges: false financial statements, off-balance sheet liabilities, undisclosed risks, complex derivatives in offshore subsidiaries and even forged signatures and counterfeited debits (bonds).
But in the 1920s some of these practices were rather common. Only 1/4th of the listed companies published quarterly results (without any detail) and 1/3th didn't even report at all. There were no real audits or GAAP rules.
Crash
A few years after the Wall Street crash, Ivar Krueger's conglomerate disintegrated. Its estimated loss was greater than Sweden's national debt. However, investors still recovered 50 % of their money after the bankruptcy proceedings were closed, even when major parts of his holdings were sold at fire prices. The Wallenberg family snatched away his main holding Swedish Match, which still exists today, like L. M. Ericsson and other subsidiaries.
New regulations
Without the collapse of Ivar Kreuger's empire, modern securities regulations and litigations, as well as GAAP rules would not exist or would be introduced much later.
Overall picture
Frank Partnoy's excellent research shows us a Match King as the first real tycoon, full of hubris, living all the time on the brink of financial breakdown, a financial genius and visionary innovator, a reckless entrepreneur who sought greatness, not wealth.
His book is a fascinating portrait of a man who knew no limits and used all means to build and extend maniacally his industrial power base.
This corporate and personal drama is a must read for all those interested in the business world and economic history.
Well written saga of the original white-collar scam artist!
The dubious Charles Ponzi's surname is near synonymous with schemes of business fraud of all shapes and sizes, but a certain suave Swede who was involved in one of the biggest financial scandals of the 20th century makes him look like small fish. His name was Ivar Kreuger. This colourful book by Frank Partnoy describes his life in some detail and brings with it a warning from history.
Kreuger set sail for America in 1922 for one reason alone - making money. In less than a decade his friends circle included President Herbert Hoover and Greta Garbo. Amassing millions, he had lent over $380 million (equivalent to $40 billion in 2007 terms) to 16 cash-strapped governments across Europe and owned stocks in 200 companies including Ericsson and SKF. All of this on strength and under garb of selling a "unique" product needed to light-up gas stoves to cigarettes in a pre-lighter age - the good old safety match.
Partnoy writes that this white-collar crime was as much about the man as his product. "There was an odd air of greatness about Ivar. I think he could get people to do anything. They fell for him, they couldn't resist his peculiar charm and magnetism," suggests the author. Over fourteen chapters, the reader gets a vivid account of Kreuger's greed and unchecked ambition.
Minus any transparency, Kreuger touted stock in his matchstick monopolies to unsuspecting investors suspiciously similar to recent scandals. Only difference was that investors were told about a near monopolistic matchstick empire. To achieve that objective - partially or at least on paper - he loaned money to stricken European governments following World War I in exchange for monopolising the local matchstick market.
By late 1920s his Svenska Tandsticks manufactured some 66% of the world's matchsticks controlling 250 plants in 43 countries earning him the title of "Match King". However, never one for prudent accounting, Kreuger was fiddling the figures. In order to keep the con going he did corrupt a few, but most were just wooed by his charms, the capacity to conjure up most convincing lies and promises of spectacular returns.
Kreuger believed financial statements were an art, not a science. When asked to name his three rules for success in business, Kreuger noted "silence, more silence, and still more silence." However, the market crash of 1929 undid him leaving massive holes in the books of his company which was wobbly at best and near-bankrupt to say the least.
By 1932 all was unravelling and a day of reckoning with his bankers was drawing ever closer. On March 12 that year, a day before the meeting with his banks, Kreuger was found dead in a Paris apartment. Some say it was suicide but others believe he was murdered. Within months of his death, press reports of his deception and manipulation of accounts hit Wall Street. America and the world realised the extent of the con. Measures soon followed in shape of the Securities Act but the suave Sweden had left his dubious mark on global financial history.
As interesting as the story is, Partnoy says it is also a warning from history. Kreuger's con was many times over Ponzi's. It spread from America to Europe and even threatened the entire financial system at one point in 1933. Hence, his story deserves to be read. If the recent financial scandals interest you, then this book on the original scam artist is a must read.
Intriguing Look at the Consequences of Poor Securities Regulation, Disclosure, and Due Diligence 
"Indeed, the light of the wicked goes out,
And the flame of his fire gives no light."
-- Job 18:5
Ivar Kreuger and his enterprises are often mentioned in passing by books and articles about the Great Depression, securities, regulation, and fraudulent leadership. Each such reference seemingly assumes that the reader knows all about the subject. Well, I didn't and I suspect you don't either.
Before the mortgage-backed securities meltdown, manipulations of the junk bond market occurred, American Express didn't have any oil in its tanks, and bad accounting made residential real estate developers look profitable when they were on the edge of bankruptcy, Ivar Kreuger used financial innovation after financial innovation to build a huge enterprise and become one of the leading lenders in the world to nations. In this book, you'll read about how those innovations began and how they ended up for the investors.
For much of his career, Mr. Kreuger kept people from realizing that his persona was a carefully calculated and staged one. No one seemed to care as long as it appeared that he was making people rich.
But his inability to understand what he could afford to pay for money caused him to overpay. Eventually, his house of matchsticks collapsed amid the market meltdown during the first few years of the Great Depression.
As an investor, it would be profitable to read this story. It will make you more skeptical of those who pay a lot for their capital. That would be a good lesson to learn.
As someone who wants to understand the financial innovations, I fear that the writing won't get the points across unless you are already pretty financially sophisticated. The book would have benefited from some detailed examples developed in tables within the text.
If you want to understand the lessons for corporate leadership, the book is also on the frail side beyond suggesting that it's a good idea to fully and accurately disclose your situation on a timely basis. At bottom, Mr. Krueger had some very interesting ideas about new business models, a point that isn't fully developed in the book.
If you want to resolve all the mysteries about his death, the book will flesh out some different theories . . . but probably won't leave you satisfied that you know the answer.
On the regulatory front, the book doesn't provide enough perspective on what current practices are to indicate the full extent that the 1920s and early 1930s practices were different. In a number of cases, I'm not sure that current due diligence is necessary much better.
As a story teller, Mr. Partnoy seems compelled to provide as much detail as possible where it's available from first-person accounts and correspondence . . . but not to fill in from other sources and perspectives. As a result, this book gives you more than even a CPA would want to know about his interactions with his accountants and auditors.
Fortunately, it's a pretty short book and Ivar Kreuger is pretty interesting. That combination makes this book a convenient way to fill in the gaps in your knowledge about this "famous" financier.
1920s Madoff
Unlike Madoff, Ivar Kreuger was first an industrial CEO. But he was able to offer considerable dividends only thanks to a Ponzi scheme. Which brought him to look for US investors money in the 1920s.
The book tells the story of how Kreuger played with his charm, accounting rules and tax havens (!)to defraud US investors.
A must read on financial fraud.
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