He applied the “Page 99 Test” to his new book, The Match King: Ivar Kreuger, The Financial Genius Behind a Century of Wall Street Scandals, and reported the following:
When Bernie Madoff confessed to a $50 billion pyramid scheme in November 2008, I considered sprinkling some last-minute references to Madoff throughout The Match King. There are so many parallels between Madoff and Ivar Kreuger: financial manipulations, consistent double-digit returns, secretive persona, Hollywood connections – everything but the bullet to the center of the heart. But my editors advised I should resist, so I simply labeled Kreuger “the original Bernie Madoff” in the Preface and left the rest for readers to discover on their own.Read more about the book and author at Frank Partnoy's website and watch Frank Partnoy on The Daily Show.
It won’t be hard for anyone to see the parallels on page 99, which is truly Madoff-esque. Our financial schemer/hero is in Paris, in February 1927, negotiating with government officials for a monopoly on the sale of strike-on-the-box matches (yes, matches – they were important back then), while fending off pesky inquiries about the legitimacy of his businesses.
The authorities might have stopped Kreuger then with a proper audit, just as regulators might have stopped Madoff if they had listened to a whistleblower years ago. But Ivar, like Madoff, ran his financial details through a fly-by-night audit firm, and the truth stopped there. It didn’t hurt that Kreuger’s investors – like Madoff’s – stuck their heads in the sand.
Page 99 also marks an early stage of Kreuger’s bipolar descent. Like Madoff, Kreuger began cracking under the pressure of generating the outsized returns he had promised investors. He began hiding records from everyone, including his trusted assistant and frequent travel companion, the beautiful Karin Bökman. Just as Madoff apparently kept secrets from his family, Kreuger didn’t want his colleagues and relatives to know an inspector might be coming.
Page 99 ends with a passage from a bizarre letter I was thrilled to discover among the miles of archived cables stashed in a castle at Vadstena, Sweden. Miss Bökman typically typed Kreuger’s letters, but he did this one alone. Unlike his assistant’s meticulous work, some of the words were out of line, “the ‘m’s were raised slightly, and there were ‘I’s in place of ‘1’s. The letter was dated ‘February I5th I927.’” It “looked a bit creepy, as if a madman had hunted and pecked each key.” Soon, that appearance of madness would become reality.