By Bill Paterson
In the opening scene of “Margin Call” a major trading firm is in the process of reducing its work force. Among those scheduled to get the axe is the firm’s long-time risk manager Eric Dale (Stanley Tucci). It is not a gentle process. Within minutes of his exit interview, Dale is being escorted out of the building. As he boards the elevator he surreptitiously hands one of his younger associates, Peter Sullivan (Zachary Quinto), a flash drive and suggests he may want to take a look at it.
That night, as his co-workers set out for a night of bar hopping, Sullivan sits down in front of his computer. Soon, lines of seemingly incomprehensible data stream across his screen. Sometime around midnight he makes a startling discovery. The supposedly sophisticated computer model which the company has used to bring in untold wealth and outsized bonuses didn’t account for an unanticipated event. It is now only a ripple but it will soon be a financial tsunami which will topple the firm. The company has taken a huge position in a raft of financial paper headed off a cliff. If Sullivan and his colleagues cannot palm it off, the firm’s days in the Wall Street sun are over.
Frantic calls go out. Soon, the previously darkened building is filled with nervous bosses and traders. The head of the trading floor, Sam Rogers (Kevin Spacey), arrives along with the “quants” who developed the investment strategy that is about to sink the firm. Last to arrive, by helicopter of course, is the firm’s cold-blooded chairman, John Tuld (Jeremy Irons). Tuld was paid $86 million dollars the previous year. The notion that the gravy train may be going off the rails galvanizes him and his cohorts into action. His plan to save the company is simple. As he puts it to those gathered around the conference table, there are three ways to succeed in the financial world: be first, be smart or cheat. In a company in which fiduciary duty is not a cherished corporate value they have only one real option – dump their positions on their unsuspecting clients and counterpart traders before the word gets out.
Continue reading – Page 23 December issue of CITATIONS