Frank Partnoy is an American legal scholar and the George E. Barrett Professor of Law and Finance at the University of San Diego School of Law.
Professor Frank Partnoy is the George E. Barrett Professor of Law and Finance and is the director of the Center on Corporate and Securities Law at the University of San Diego. He is one of the world’s leading experts on the complexities of modern finance and financial market regulation. He worked as a derivatives structurer at Morgan Stanley and CS First Boston during the mid-1990s and wrote F.I.A.S.C.O.: Blood in the Water on Wall Street, a best-selling book about his experiences there.
Since 1997, he has been a law professor at the University of San Diego, and an expert writing and speaking about markets to Congress, regulators, academics, and investors. He has written numerous opinion pieces for The New York Times and the Financial Times, and more than two dozen scholarly articles published in academic journals including The Journal of Finance.
His recent books include Infectious Greed: How Deceit and Risk Corrupted the Financial Markets, a leading corporate law casebook, and The Match King: Ivar Kreuger, The Financial Genius Behind a Century of Wall Street Scandals, about the 1920s markets and Ivar Kreuger, who many consider the father of modern financial schemes, which was a finalist for the Financial Times/Goldman Sachs Business Book of the Year in 2009. His most recent book is WAIT: The Art and Science of Delay, published by PublicAffairs in June 2012.
Professor Partnoy also has been a consultant to many major corporations, banks, pension funds, and hedge funds regarding various aspects of financial markets and regulation.
F.I.A.S.C.O.: Blood in the Water on Wall Street
F.I.A.S.C.O. is the shocking story of one man's education in the jungles of Wall Street. As a young derivatives salesman at Morgan Stanley, Frank Partnoy learned to buy and sell billions of dollars' worth of securities that were so complex many traders themselves didn’t understand them. In his behind-the-scenes look at the trading floor and the offices of one of the world's top investment firms, Partnoy recounts the macho attitudes and fiercely competitive ploys of his office mates. And he takes us to the annual drunken skeet-shooting competition, FIASCO, where he and his colleagues sharpen the killer instincts they are encouraged to use against their competitors, their clients, and each other. F.I.A.S.C.O. is the first book to take on the derivatives trading industry–the most highly charged and risky sector of the stock market. More importantly, it is a blistering indictment of the largely unregulated market in derivatives and serves as a warning to unwary investors about real fiascos, which have cost billions of dollars.
Infectious Greed: How Deceit and Risk Corrupted the Financial Markets
Recent corporate scandals have brought our attention to the dangerously complex and unregulated financial practices of some of the world’s most successful companies. Frank Partnoy, author of the riveting business bestseller F.I.A.S.C.O.: The Inside Story of Wall Street Trader, brings his impressive understanding of complex financial transactions and legal expertise to a fascinating tour of the institutions, scandals, and business cultures that brought us to this moment. In tracing the evolution of increasingly complex derivatives’ use over the past fifteen years–and an appetite for risk and return that made it possible–Partnoy demonstrates that despite the media’s narrow focus on Enron, it was only the tip of the iceberg. The culmination of a steady erosion of personal and institutional control, today’s financial landscape is loaded with ticking time bombs with far greater potential for harm and loss than any other period in our history.
The Match King: Ivar Kreuger, The Financial Genius Behind a Century of Wall Street Scandals
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.”
Unfortunately, the silence killed, and by the end Kreuger’s shares were worth just pennies. Historians, including John Kenneth Galbraith and Arthur M. Schlesinger, Jr., labeled Kreuger the greatest fraud in history.
WAIT: The Art and Science of Delay
Warren Buffett compares stock trading to being at bat, except that you don’t have to swing until there’s a fat pitch. Great athletes agree, but with shorter time horizons. They excel, not because of fast neurological responses, but because of their ability to delay as long as possible before reacting, returning a serve or grabbing a rebound. Successful CEOs, fire fighters, and military officers all know how to manage delay.
In this provocative, entertaining book, Frank Partnoy provides a necessary rebuttal to the gurus of “go with your gut.” He shows that decisions of all kinds, whether “snap” or long-term strategic, benefit from being made at the last possible moment. The art of knowing how long you can afford to delay before committing is at the heart of many a great decision—whether in a corporate takeover or a marriage proposal. Exploring decisions from those made in half a second to those that take months and years, Partnoy demonstrates that procrastination is often virtuous, that the ability to wait is the path to happiness, and that our gut instincts often betray us. We do not always make smart choices in the blink of an eye, as this eye-opening book reveals.
Professor Partnoy’s major casebooks, book chapters, and articles are listed below. Other recent publications are included in the Media section of this website and all of Professor Partnoy’s publications are listed on his resume, which is available Frank Partnoy's Resume. Versions of the book chapters and articles generally are available online: the links to most of them are to the version posted to the Social Science Research Network, which you many download at no charge.
- CORPORATIONS: A CONTEMPORARY APPROACH (Thomson 2010) (with Alan R. Palmiter)
- BUSINESS ORGANIZATION AND FINANCE, LEGAL AND ECONOMIC PRINCIPLES (with John C. Coffee, Jr. and William A. Klein) (Thomson 2010)
- How Financial Regulation Might Harness the Power of Markets, in RULES FOR GROWTH: PROMOTING INNOVATION AND GROWTH THROUGH LEGAL REFORM (Ewing Marion Kauffman Foundation 2011)
- Overdependence on Credit Ratings Was a Primary Cause of the Crisis, in THE PANIC OF 2008: CAUSES, CONSEQUENCES, AND IMPLICATIONS FOR REFORM (Edward Elgar Press 2010, Lawrence Mitchell and Arthur Wilmarth, eds.)
- Gap Filling, Hedge Funds, and Financial Innovation, in NEW FINANCIAL INSTRUMENTS AND INSTITUTIONS: OPPORTUNITIES AND POLICY CHALLENGES (Brookings Institution Press 2007, Yasuyuki Fuchita and Robert E. Litan, eds.) (with Randall Thomas)
- How and Why Credit Rating Agencies Are Not Like Other Gatekeepers, in FINANCIAL GATEKEEPERS: CAN THEY PROTECT INVESTORS? (Brookings Institution Press 2006, Yasuyuki Fuchita and Robert E. Litan, eds.)
- Enron and the Derivatives World, in ENRON: CORPORATE FIASCOS AND THEIR IMPLICATIONS (Foundation Press 2004, Nancy B. Rapoport and Bala G. Dharan, eds.)
- ISDA, NASD, CFMA, and SDNY: The Four Horsemen of Derivatives Regulation?, in BROOKINGS-WHARTON PAPERS ON FINANCIAL SERVICES (Brookings Institution Press 2002, Robert E. Litan and Richard Herring, eds.)
- The Paradox of Credit Ratings, in THE ROLE OF CREDIT REPORTING SYSTEMS IN THE INTERNATIONAL ECONOMY (Kluwer Academic Publishers 2002, Richard M. Levitch, Giovanni Majnoni, and Carmen Reinhart, eds.)
- The Abraham L. Pomerantz Lecture: Don’t Blink: Snap Decisions and Securities Regulation, 77 BROOKLYN LAW REVIEW 151 (2011)
- Patents as Options, in Perspectives on Commercializing Innovation (F. Scott Keefe, ed.) (with Shaun P. Martin) (Cambridge University Press 2011)
- Credit Rating Agencies under the Dodd-Frank Act, 30 BANKING & FINANCIAL SERVICES POLICY REPORT 1 (Dec. 2011) (with Aline Darbellay)
- Credit Default Swap Spreads as Viable Substitutes for Credit Ratings, 158 UNIVERSITY OF PENNSYLVANIA LAW REVIEW 2085 (2010) (with Mark J. Flannery and Joel F. Houston)
- Bring Transparency to Off-Balance Sheet Accounting, Roosevelt Institute White Paper, Mar. 2010 (with Lynn E. Turner)
- Historical Perspectives on the Financial Crisis: Ivar Kreuger, the Credit Rating Agencies, and Two Theories about the Function, and Dysfunction, of Markets, 26 YALE JOURNAL ON REGULATION 431 (2009)
- Shapeshifting Corporations, 76 UNIVERSITY OF CHICAGO LAW REVIEW 261 (2009)
- Rethinking Regulation of Credit Rating Agencies: An Institutional Investor Perspective, Council of Institutional Investors White Paper, Apr. 2009
- The Match King, Chapter 9: The Author’s Cut, 2009 MICHIGAN STATE LAW REVIEW 1207 (2009)
- The New Shareholder Activism (with Randall S. Thomas)
- The Returns to Hedge Fund Activism, 64 FINANCIAL ANALYSTS JOURNAL 27 (2008) (with Alon Brav, Wei Jiang, and Randall Thomas)
- Hedge Fund Activism, Corporate Governance, and Firm Performance, 63 JOURNAL OF FINANCE 1729 (2008) (with Alon Brav, Wei Jiang, and Randall Thomas)
- The Promise and Perils of Credit Derivatives, 75 UNIVERSITY OF CINCINNATI LAW REVIEW 1019 (2007) (invited symposium) (with David A. Skeel, Jr.)
- Second-Order Benefits from Standards, 47 BOSTON COLLEGE LAW REVIEW 169 (2007)
- Alternative Structures and Strategies for Investors, 1 JOURNAL OF BUSINESS & TECHNOLOGY LAW 84 (2006)
- Financial Innovation and Corporate Law, 36 JOURNAL OF CORPORATION LAW 799 (2006)
- Encumbered Shares, 2005 UNIVERSITY OF ILLINOIS LAW REVIEW 775 (2005) (with Shaun P. Martin)
- Synthetic Common Law, 53 UNIVERSITY OF KANSAS LAW REVIEW 281 (2005)
- Strict Liability for Gatekeepers: A Reply to Professor Coffee, 84 BOSTON UNIVERSITY LAW REVIEW 365 (2004)
- A Revisionist View of Enron and the Sudden Death of “May,” 48 VILLANOVA LAW REVIEW 1245 (2003) (invited symposium), reprinted in ENRON AND WORLD FINANCE: A CASE STUDY IN ETHICS (2006)
- Multinational Regulatory Competition and Single-Stock Futures, 21 NORTHWESTERN JOURNAL OF LAW AND INTERNATIONAL BUSINESS 641 (2001)
- Finance and Patent Length, University of San Diego Law & Economics Research Paper No. 19 (2001)
- Barbarians at the Gatekeepers?: A Proposal for a Modified Strict Liability Regime, 79 WASHINGTON UNIVERSITY LAW QUARTERLY 491 (2001)
- Some Policy Implications of Single-Stock Futures, FUTURES & DERIVATIVES LAW REPORT, Mar. 2001
- Derivatives on TV: A Tale of Two Derivatives Debacles in Prime-Time, GREENBAG (2001) (with Kimberly D. Krawiec and Peter H. Huang), reprinted at 2 DERIVATIVES REP. 15 (2001)
- The Shifting Contours of Global Derivatives Regulation, 22 UNIVERSITY OF PENNSYLVANIA JOURNAL OF INTERNATIONAL ECONOMIC LAW 421 (2001)
- Why Markets Crash and What Law Can Do About It, 61 UNIVERSITY OF PITTSBURGH LAW REVIEW 741 (2000)
- Adding Derivatives to the Corporate Law Mix, 34 GEORGIA LAW REVIEW 599 (2000)
- The Siskel and Ebert of Financial Markets: Two Thumbs Down for the Credit Rating Agencies, 77 WASHINGTON UNIVERSITY LAW QUARTERLY 619 (1999), reprinted at 33 SECURITIES LAW REVIEW 161 (2001)
- Financial Derivatives and the Costs of Regulatory Arbitrage, 22 JOURNAL OF CORPORATION LAW 211 (1997)