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Is Margin Call Based on Lehman Brothers?


Margin Call is a 2011 film written and directed by J. C. Chandor. It stars Kevin Spacey, Jeremy Irons, Paul Bettany, Zachary Quinto, Simon Baker, Penn Badgley, Demi Moore, Mary McDonnel and Stanley Tucci.


The film’s subject is the 2007-2008 financial crisis and it charts the pivotal 24 hours at the start of the crisis, detailing events at a large Wall Street investment bank.


Margin Call
©Netflix

It has long been assumed that the investment bank at the heart of the film’s story is Lehman Brothers, or it is at least heavily based on Lehman Brothers. However, the film’s director has stated that this is not the case.


So, what are the arguments for and against?


Lehman Brothers
©EPA/Justin Lane

Reasons to Believe Margin Call is Based on Lehman Brothers


The most common argument for the bank in the film being based on Lehman Brothers is the name of the CEO in the film, John Tuld, played by Jeremy Irons.


The CEO of Lehman Brothers at the time of the financial crisis was Richard Fuld. Both of these names are pretty unusual, so it does feel like too much of a coincidence to name your CEO in this way.


Investment bankers based on Wall Street at the time of the financial crisis have stated that the dress code in the film was very Lehman Brothers 2008. The dress code at the time differed between the different banks, and Lehman Brothers was more formal than some of the other banks.

Reasons to Believe Margin Call is Not Based on Lehman Brothers


The strongest argument for the bank in Margin Call not being based on Lehman Brothers comes from the director himself.


Margin Call was J.P. Chandor’s first feature film and he wrote as well as directed it. He grew up surrounded by bankers and this is one reason why the film’s portrayal of Wall Street is so realistic. His father was a banker at Merrill Lynch.


J. P. Chandor writer and director of Margin Call
J. P. Chandor ©Evan Agostini/Invision/AP

While being interviewed after the film’s release, J. P. Chandor stated that his idea for Margin Call actually came before the financial crisis, in 2005.


He tells the story that along with some friends, he borrowed $10 million from a bank to buy a building on the edge of SoHo, with a plan to renovate it. At 37, he was already a documentary producer and commercial director, and was looking to invest in real estate. The group were surprised how easy it was to borrow so much, but New York City's real estate market was very buoyant at the time.



Then, the following year, one of his friend's godfather, who had been an investment banker, had started getting worried about the markets, and told them in no uncertain terms that they should sell as quickly as possible. They had had a few offers on the building and so look his advice. Incredibly, they were just out of the property market when the crisis hit. This timely advice made an impression on J. P. Chandor, and planted the seed for the film that was to follow. As he explained:


“That was the first nugget, that idea of the guy who is walking around and thinks he knows what is about to happen, but the rest of the world is pressing the accelerator button.”


J. P. Chandor quote on Margin Call


After the film was released, The Financial Times took an investment banker to see the film and then interviewed him afterwards. The investment banker confirmed that the portrayal of life in a Wall Street investment bank was very accurate, down to what people were wearing and the layout of the headquarters. He agreed that the firing of Eric Dale (played by Stanley Tucci) was very accurate, based on his experience of working at Merrill Lynch. So, in his opinion, the firm portrayed was not meant to be Lehman Brothers, but a representation of a typical investment bank at that time.



While John Tuld’s name is used by many as a pointer to the bank in Margin Call being based on Lehman Borthers, others believe that John Tuld’s name is actually a combination of Merrill Lynch’s ex-CEO John Thain and Lehman Brother’s ex-CEO Richard Fuld. This points to the bank in Margin Call being more of a generic bank rather than specifically Lehman Brothers.


Others argue that the bank in the film is much more similar to Goldman Sachs. Goldman Sachs also hedged early, reducing its position in mortgage-backed securities, just like the bank in Margin Call. That bank did not go bankrupt, unlike Lehman Brothers, which did.


Is Margin Call Based on Lehman Brothers? - The Verdict


The film is absolutely based on the culture prevalent in Wall Street investment banks at that time. It is realistic partly because of the director’s personal experience, but he himself says it is not meant to depict an actual real-life firm.


As we’ve seen, the bank could just as well be a depiction of Merrill Lynch, or Goldman Sachs. In fact, it could also be JP Morgan or Citigroup, who were also awarded fines for betting against their clients during the financial crisis.


Lehman Brothers is the first bank most people think of when discussing the financial crisis of 2007-2008, mostly because it went bankrupt, but it is worth remembering that the investment bank portayed in Margin Call didn’t go bankrupt.


The most important argument of course, is that the writer and director has stated that the investment bank portrayed in Margin Call is fictional.