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Professor Frank Partnoy on Newshour with Jim Lehrer

SAN DIEGO, March 3, 2009 — University of San Diego School of Law Professor Frank Partnoy's expertise was tapped by PBS's The Newhour with Jim Lehrer on Monday, March 2. In the interview Partnoy describes how insurance giant AIG abandoned its traditional insurance business in favor of a second business of derivatives, credit default swaps.

Partnoy states the credit default swaps business carried the seeds of disaster that we're seeing now and have seen in recent months. The professor and director of USD's Center for Corporate and Securities Law places much of the blame for the financial crisis on credit rating agencies such as Moody and Standard and Poor, both of which provided AAA ratings for credit default swaps that clearly did not deserve the highest investment rating.

Partnoy goes on to warn that the financial sector still relies too heavily upon credit rating agencies when making investment decisions.

Watch the interview in its entirety.

Professor Partnoy, who directs the school's new Center for Corporate and Securities Law, is widely known for his book on Enron and other financial scandals, Infectious Greed: How Deceit and Risk Corrupted the Financial Markets. His forthcoming book, The Match King, examines the legacy of Ivar Kreuger, whose financial misdeeds led to much of our current securities and accounting regulation.

Frank Partnoy
Securities Expert and USD Law Professor Frank Partnoy