The Match King
He charmed everyone, from President Hoover to Greta Garbo to the journalists who put his boyish face on the covers of Time and The Saturday Evening Post. Kreuger favored perception over reality. He believed financial statements were an art, not a science.
Capital Thinking • Issue #138 • View online
“Unlike Charles Ponzi or even the infamous Bernie Madoff, Ivar Kreuger had a working business. It wasn’t, however, a business worthy of the investment capital Kreuger consumed in running it.
The real answer is that Kreuger started out as a businessman and stepped across the line of aggressive growth to outright fraud.
The same line that has tripped up men like Dennis Kozlowski, Kenneth Lay, Bernie Ebbers, John Rigas and many others. It’s true that Kreuger and Madoff were able to stretch out the time during which they enjoyed their illicit gains, but the consequences are inevitable.
Ivar Kreuger caused nightmares for people on Wall Street as well as Main Street, but Kreuger’s life quickly became a waking nightmare from which he saw only one escape.”
9 Essential Conditions to Commit Massive Fraud
On October 28th, the day before Black Tuesday, the crescendo moment of the Crash of 1929, Time Magazine had a financier on its cover.
At that time, virtually everyone in the international community had known his name all too well, although investors today probably wouldn’t recognize it.
He was a confidant of kings and princes, dictators and captains of industry, a noted companion to the international movie star Greta Garbo and the close personal friend of President Herbert Hoover.
Little did anyone suspect that he was also destined to be be revealed as the biggest fraud in the history of Wall Street.
The more you read about financial history (and the more of it you live through), the more you start picking up on repeating patterns.
This is not because the markets never change. They absolutely do. But people…people don’t change.
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And this from the man who wrote the book on Kreuger
“Ivar Kreuger, the infamous “Match King”, is remembered as the most colorful and compelling business personality of the roaring 1920s.
From 1929 to 1932, he was the most talked-about business man in the world, for good reason.
Wealthier than Morgan and as generous as Rockefeller, he miraculously survived the Great Crash, only to be found, one dark Paris morning, with a bullet through his heart.
Opinions about Kreuger were deeply divided: hero or villain, innovator or fraudster, suicide or murder victim.Kreuger was known as the “Match King” because he held monopolies on the sale of matches in many countries, but his financial empire extended to banking, construction, film, mining, paper, railways, and telephones.
He was a statesman as well as a financier, and usurped Jack Morgan as the leading lender to Europe.
He rescued France from bankruptcy, and nearly saved Germany.
He charmed everyone, from President Hoover to Greta Garbo to the journalists who put his boyish face on the covers of Time and The Saturday Evening Post.
Kreuger favored perception over reality. He believed financial statements were an art, not a science.
When asked to name his three rules for success in business, Kreuger advised “silence, more silence, and still more silence.”
- Frank Partnoy, author ”The Match King“