Barbarians at the Gate (1993; comedy; 107 minutes; leveraged buyout)
This is both a docudrama and a comedy. It is based on a book about the well-known and then-biggest leveraged buyout of food giant RJR Nabisco. It is a story of greed, egos, lust for luxury, high stakes, and treachery. The film offers an insider’s perspective on the brutal competition that surrounds a leveraged buyout (LBO).
Rogue Trader (1999; drama; 101 minutes; equity futures trading)
When this film came out, in 1999, it was quite clear whom it was about — Nick Leeson, who brought down Britain’s oldest investment bank, Barings. Since then, alas, more such traders have followed in Leeson’s footsteps. The film is based on Leeson’s own book, Rogue Trader: How I Brought Down Barings Bank and Shook the Financial World. Once the star trader of Barings, he lost more than a billion dollars through unauthorized futures trading on the Singapore exchange. The film shows that his superiors had deluded themselves into believing that Leeson was earning large profits by putting their meaningless management-speak into action.
Boiler Room (2000; drama; 120 minutes; securities fraud)
This film depicts finance at its absolute worst: A group of lying, cheating, stealing young stockbrokers sell worthless stocks to people they can fool using high-pressure sales calls. “You will make your first million in three years” is the promise made by J.T. Marlin to its batch of young recruits. If Wall Street explains insider trading, this one explains the pump and dump. Money is everything for these guys, and they make their money by closing sales.
The Corporation (2003; documentary; 145 minutes; legal person)
The most destructive sociopath of modern times, according to this hard-hitting documentary, is the corporation itself. The opening line says it well: “One hundred and fifty years ago, the business corporation was a relatively insignificant institution. Today, it is all pervasive.” The Corporation is not strictly a finance film, but it deals with the concept of limited liability and externalities. Featuring a number of interviews with prominent thinkers, the documentary digs deep into the ideas underlying corporations, contrasting the natural person (human) with the legal person (the corporation) and exploring why some large, profit-hungry companies seem to have little regard for society and the environment.
Enron: The Smartest Guys in the Room (2005; documentary; 110 minutes; accounting fraud)
The sudden collapse of Enron in 2001, then one of the largest companies in the United States, is one of the best-known corporate governance disasters. This documentary, based on the book The Smartest Guys in the Room: The Amazing Rise and Scandalous Fall of Enron, analyzes that collapse and shows the underlying greed and arrogance of the company’s executives. It is the story of Enron turning real losses into fictional profits through accounting fraud. How Enron was making its money was a mystery that no one seemed to question.
Margin Call (2011; drama; 107 minutes; financial recklessness)
This is a relatively slow-paced story of an intense 24 hours in the life of a financial institution that is in deep trouble. The bank has large and leveraged speculative positions that are facing so much volatility that the losses could be greater than its market value. (Despite what the title of the film may suggest, there is in fact no margin call issued to or by the institution.) The risks are complex, and only one risk analyst (with a doctorate in rocket science) can really understand them. Reckless speculation, however, is not the institution’s only defining characteristic.
Wall Street: Money Never Sleeps (2011; drama; 133 minutes; moral hazard)
Gordon Gekko is back, but this time in a feel-good film. After serving jail time for what happened in the prequel, Wall Street, the former insider is now an outsider. But he has not come back without some quotable quotes: “Someone reminded me I once said greed is good. Now it seems it is legal. Because everybody is drinking the same Kool-Aid.” Unlike Wall Street, this is a relatively complicated story, and the film devotes a good deal of time to the emotional drama of Gekko’s strained relationship with his daughter, her up-and-down relationship with her partner (played by Shia LaBeouf), and his relationship with his mother, whom he must repeatedly bail out from financial troubles.
The Ascent of Money (2008; documentary; 120 minutes; financial history)
In this documentary, based on a book with the same title, Niall Ferguson, author and academic, traces the evolution of money, bond markets, insurance, and the subprime mortgage debacle. A key lesson from this documentary is the same as that from history in general: This time is not so different; it has happened before — and more than once. We need only read history to find out. Ferguson’s thesis is that the history of money can help explain all human history
Capitalism: A Love Story (2009; documentary; 127 minutes; capitalism)
This may well be the most provocative film on the list. Made by Michael Moore, who is described in the trailer as “the most feared film director in America,” it hits Wall Street hard, gives voice to some of the views held by ordinary Americans, and goes after the ideology of free market capitalism. It does so in the context of the social cost of the financial crisis in the United States.
Why Are We All in Debt? (2009; documentary; 26 minutes; alternative monetary system)
This documentary is the shortest film on my list. As the title suggests, it addresses a fundamental question that puzzles many: How come we are all in debt? The principal writer and presenter in this documentary is the Islamic finance author and former bond-derivatives dealer Tarek El Diwany.
Inside Job (2010; documentary; 105 minutes; financial crisis and regulation)
One of the most insightful documentaries on the 2008 financial crisis, this film, narrated by Matt Damon, makes the case that the crisis could have been avoided if regulation had been adequate. An early line sets the tone: “This crisis was not an accident. It was caused by an out-of-control industry.” It is similar in spirit to Capitalism: A Love Story but strikes a more serious tone and goes about analyzing the crisis, largely through a series of interviews with well-placed individuals — politicians, journalists, and academics.
Too Big to Fail (2011; drama; 99 minutes; systemic risk)
Based on the book with the same title, this film is about the 2008 financial crisis, the bankruptcy of Lehman Brothers, and the subsequent bank bailouts. Its title is a phrase that has entered into the popular lexicon because of the financial crisis. Like Wall Street: Money Never Sleeps, this docudrama covers the subject of moral hazard.
©CFA Institute 2016
The article was first published on blogs.cfainstitute.org