Frank Partnoy is a law professor at the University of San Diego and has written several books about financial markets, including The Match King: Ivar Kreuger, The Financial Genius Behind a Century of Wall Street Scandals (just out from PublicAffairs).

The senator's financial reform proposal is missing one key paragraph—and without it, the idea that banks will be kept honest is just a charade.

Wall Street's fiscal report cards came out Thursday afternoon. Frank Partnoy argues they prove only one thing: the government will go to any lengths to prop up the nation's worthless banks.

The forgotten saga of Ivar Kreuger—a financial fraudster from the 1920s who spun lies to friends and investors, was put under surveillance in his Park Avenue apartment, and sparked an epic bankruptcy scandal— provides valuable lessons for today’s economic crisis.