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Arbitrage (2012)


This page has been the subject of considerable controversy. Within hours of its publication, Lionsgate, acting through the Morganelli Group, issued the first of what proved to be a series of Takedown Notices. The intention, in my opinion, was unlawfully to chill my freedom of speech. But to keep the peace while the matter was being resolved, all images were removed from the page. Now that the matter has been resolved, I have restored a copy of the poster which, in my opinion, always was protected as fair use, i.e. it was used in the context of a non-commercial critical commentary of the film for which it serves as poster art. Use for this purpose does not compete with the purposes of the original artwork, namely the creator providing graphic design services, and in turn the marketing of the promoted item. I have also restored the three still photographs from the film.


As the matter proceeded, I offered my opinion at Lionsgate and the use of DMCA notices, Lionsgate continues its bad faith campaign over the review of Arbitrage, and Lionsgate continues its bad faith sequence of DMCA notices.


May 1st 2013 brings the news that the final URL blighted by Lionsgate (in fact by one of Lionsgate’s agents) has now been reinstated. Lionsgate’s malicious reaction to this review has produced four months of disruption. Hopefully, this is an end of the matter. Lionsgate’s malicious campaign now apparently defeated


For you to understand my reaction to Arbitrage (2012), I have to go back in time to a favourite of mine. Butch Cassidy and the Sundance Kid (1969) had two villains played by Paul Newman and Robert Redford. These were two of the more likeable and bankable of stars. The casting predisposed the audience to sympathise with them as criminals. On its own, this would not have been enough, so the script set out to make them less disagreeable. First, they might rob banks and steal from trains, but they never killed anyone. Second, they always threatened to give up the life of crime for the love of a good woman. Finally, whatever they did, they did with a laugh and a smile. We wanted them to be able to retire, put down their guns and put up their feet without fear of pursuit. Even now the ambiguity of the ending remains a classic. We know it’s almost certainly death but they lived in hope. Let’s now switch to a different type of film. In Margin Call (2011) we have an intelligent on-screen debate about the morality of selling a financial product you believe to be worthless. Kevin Spacey is the ethical touchstone. Jeremy Irons is the pragmatist who rightly points out no-one has to buy what’s on offer. The value of the film lies in the quality of the debate. It neither glorifies greed nor exonerates dishonesty. It simply shows how big money decisions are taken. As an aside, neither Spacey nor Irons have the same charisma as Newman and Redford, nor are there any jokes to leaven the dough.

Richard Gere putting on a show

Richard Gere putting on a show


So what are we to make of a film that casts Richard Gere in the leading role of Robert Miller? As something of a sex symbol when younger, he still has quite a high swoon factor. In 1999, he was People magazine’s “sexiest man alive”. Not bad for a fifty-year old. Now into his sixties, he still manages to command the screen with that easy smile. This time around, he’s playing the part of a rogue with almost no apparent redeeming features. One of his deals has come unstuck so, to cover up his losses, he’s cooking the books and trying to make a quick sale before the losses are discovered — a part of the sale price will fill in the hole in the accounts and leave all the investors protected. Better still, all the staff of the investment firm will stay in work (including his son and daughter). I suppose this makes him slightly better than Bernie Madoff who could not begin to pay people back, but even with the most benign interpretation of his behavior, his lawyer is advising him he will spend a not inconsiderable number of years in jail if he can’t make the sale. Of course, the sale depends on a clean auditing report and no-one internally noticing and blowing the whistle. There’s a considerable circle of friends and business associates who are conspiring with him.

Tim Roth trying to find a way to take down the criminal

Tim Roth trying to find a way to take down the criminal


As the ultimately selfish male, he’s also a serial adulterer. He may do everything in his power to maintain the illusion of a perfect marriage, but he and his wife played by Susan Sarandon acknowledge it as a sham. Like almost everything in his life, he does enough to hide his dishonesty from those who would give him away. All the others are as bad or worse than him and so would never give him away. In the midst of all this, he kills his current mistress when he falls asleep at the wheel of her car. He calls a young man out to drive him home. Jimmy Grant (Nate Parker) has a conviction and will go to jail if he admits helping our hero flee the scene. This gives Detective Michael Bryer (Tim Roth) an opening. If he can do a deal with Jimmy, he can nail our “hero”. All this is designed to make us care. Indeed, I believe the intention of Nicholas Jarecki who both wrote the script and directed, is to have us cheering Richard Gere on in his desperate attempts to push through the sale and avoid detection as a killer. Personally, I find this rather offensive. I don’t mind a film-maker showing us a criminal as anti-hero in a relatively neutral or, more reasonably, a disapproving way. But I do object when, from the outset, the point of the film is to show an unpleasant fraudster get away with a homicide.

Susan Sarandon beginning to see the problem

Susan Sarandon beginning to see the problem


So even though some elements of the film do show some sense of realism, I left the cinema feeling I had just been exposed to something with a bad smell. Keeping this in perspective, every city in the world has people like this who use their position in society to get away with their crimes. Sadly, those with power have a high degree of immunity from prosecution. In cinema terms, I’m not advocating a return to the bad old days of the Hays Code in which scripts and productions were sanitised. But just as I question Hollywood’s glorification of gun ownership, showing the use of pistols and rifles in both defence and offence, I think any film encouraging sympathy for career criminals is dangerous. Sending the message you can buy your way out of trouble if you have enough money is not what we want to be telling young audiences. At some point, law enforcement should be allowed to prevail or at least to win a partial victory. So, if you do not share my code of ethics, you may well find Arbitrage the best possible way to show the lives of the bankers and investment managers who earn all these obscene bonuses on Wall Street and in the City of London.


  1. Webster Skyhorse
    March 7, 2013 at 11:34 am

    Your review is on point. I don’t see why a bad faith campaign was necessary. They’re a small studio meant to offer smarter, more provocative titles. That’s what this film was. Why then suppress critical readings of it? For shame Lionsgate. They should welcome debate about the morality or amorality of Robert Miller. I’d argue that Gere prevails only in the material sense, and a closer reading reveals it’s a Pyrrhic victory. All of his fortunes may be secured and his crimes concealed, but in achieving this he’s lost the last shreds of his humanity and is totally oblivious to it — he has become a pure psychopath, driven solely by greed and his warped sense of duty to generate RESULTS.

    Whether Jarecki intended this troubling reading or not, it’s there and I think, while not super vocal about it in doing press, Gere is aware of, if not responsible for adding, this wrinkle in his character’s journey. By the end of the film, all the women in Gere’s life are lost to him. All his relationships forevermore will be transactional and without love. I don’t think this was lost on Gere as he built the character. Like AMERICAN GIGOLO and INTERNAL AFFAIRS, I think he saw the potential to craft a darker and more complex character whose charms work to deceive both those in the film as well as those in the audience.

    • March 7, 2013 at 12:11 pm

      Thanks for the support. The irony in all this comes when you view the poster Lionsgate uses to promote the film. “Power is the best alibi”, i.e. a wealthy criminal escapes prosecution. This rather neatly reflects Lionsgate’s abuse of the DMCA to chill criticism of its film. While I try to sort out the mess, traffic to my site is more than halved. I suspect someone involved in the making of the film took my comments personally and decided to retaliate. This is power used for Lionsgate’s commercial benefit because it believes itself to be immune from consequences.

  2. RickPucci
    March 8, 2013 at 1:34 pm

    You’re right on the “money.” Engrossing film but an empty feeling walking away knowing the bad guys won. Good should always prevail over evil.

    • March 8, 2013 at 2:26 pm

      Thanks for the thought. It’s not so much that he beats the system that gets me, it’s the expectation we’re supposed to applaud that I dislike.

  3. Geoff Bobker
    March 13, 2013 at 4:27 am

    I’m not sure what you’re offended by. Yes, Robert Miller is a manipulative, amoral, greedy, fraudulent, adulterous financier – but so are many men on Wall St etc. Yes, he is also intelligent, attractive, charming & self-confident – but again so are many men in the real financial world. For me, the movie – in the heightened way we expect from art – is simply reflecting the world as it is.

    It seems you & others would have been happier if we’d seen Miller arrested & in handcuffs before the film ended – though he may well be later on! But yet again that simply reflects reality – for each one of the Bernie Madoffs who get caught, you can be sure there are many more who escape justice.

    As for David Marshall’s comment that we’re expected to applaud Miller, I think he’s just been seduced by Gere/Miller, like his victims.

    • March 13, 2013 at 9:54 am

      When a film-maker puts images into the public domain for viewing, the scriptwriter or film-maker is expressing a point of view about the subject matter. So, for example, a film may show a gay person or an illegal immigrant subject to abuse, a woman or man raped, a murder/manslaughter situation, and so on. The images will be presented on the screen in a way that signals approval or condemnation of the actions and/or omissions of those involved. This semiotic communication process is effected through the choice of actors, the acting style they adopt, the way the scenes are composed and lit, the choice and style of music, and so on. As viewers we’ve learned how to decode all these signals and so understand whether we’re expected to approve or disapprove what we see. In my opinion, this film is made with an intention to encourage the audience to approve the actions of Robert Millar and all those who knowingly assist him to evade liability for the fraud and manslaughter. It follows from this that Robert Millar is merely an exemplar and that we’re expected to approve a society in which the wealthy can use their money and power to evade liability. In this, it’s perhaps convenient to consider the media coverage of Bernard Madoff whose sons told authorities that their father had confessed to them that the asset management unit of his firm was a massive Ponzi scheme. We’ve been encouraged to approve their behaviour and to disapprove their father’s fraud. In this film, the family closes ranks and says nothing i.e. they become complicit in the fraud. In the real world and despite their whistle-blowing, Madoff’s sons and his brother Peter are being sued for negligence and breach of fiduciary duty. In this film, where is the condemnation of the family’s implicit approval of the fraud through their silence? They are motivated by greed and the desire to retain their wealth, and are willing to break the law. Indeed, I challenge you to identify any plot thread or signifier that disapproves the fraud and cover-up of the manslaughter. In this, it’s not a case of whether I am seduced by one character. It’s whether I am correctly decoding the iconography of this film. So help me out. Why should I approve this film’s point of view?

  4. June 1, 2013 at 6:40 pm

    Hey David, congratulations on winning your free speech battle with Lionsgate over your review of ‘Arbitrage’. I wholly agree with you as to how bitterly ironic it is that intelligent criticism of a film portraying the cover up of immoral abuses by the rich and powerful has faced an immoral abuse of the DMCA Takedown Notice schema by the film’s (relatively) rich and powerful production company. Good on you, David, for standing up for our inalienable human right to the free expression of our ideas. .

    SPOILER ALERT: what follows reveals plot points of ‘Arbitrage’ which may spoil your enjoyment of this film if known in advance; better to watch the movie first before reading what follows.

    As an anti-capitalist activist, I note that my take on ‘Arbitrage’ is somewhat at odds with yours. I do appreciate your well-argued position that you believe a movie writer/director has a moral responsibility to show that “karma” works, that what goes around comes around, and that the audience should be shown how the evil that men do brings them crashing down. However, I’d argue as how that is exactly what Nicholas Jarecki has achieved here – not through granting his evil anti-hero criminal protagonist an early death (a la ‘Butch Cassidy and the Sundance Kid’), nor by having him face jail time for manslaughter (a la countless ‘cops vs. criminals’ films and TV shows), but by completing his alienation from that which he admits it’s taken him 60 years to discover: the irreplaceable true value of the love and respect of his family for him.

    As the C19 French novelist and playwright Honoré de Balzac puts it in his tragicomic novel ‘Le Père Goriot’:

    “The secret of a great fortune for which you are at a loss to account is a crime that has never been found out, because it was properly executed.”

    Mainstream bourgeois morality is completely comfortable with the majority of people who actually create value and recreate society, ie: the working class (aka the 99%), being economically exploited by the small minority of rich and powerful people, ie: the capitalist class (aka the 1%) – as personified here by Robert Miller (Richard Gere) – because such blatant exploitation is the bedrock of capital accumulation. But the boss class is at least supposed to ‘play by the rules’ (of their own making), and those that transgress are branded as ‘white collar criminals’. However, what Jarecki is showing his film’s audience is the dialectical contrast between form and content: how the much feted capitalist ‘Masters of the Universe’ are in fact riddled with corruption, and how its ‘honourable businessmen’ – Robert Miller, his friend Jeffrey Greenberg (Larry Pine), his buyer James Mayfield (Graydon Carter) – are all content to both perpetrate such corruption and to blithely accept that others will do the same, in pursuit of their ‘legitimate’ business interests. In short, it’s a decadent economic system which is rotten to the core, where the only ‘crime’ is getting caught, and where the shallow appearance of ’success’ is what the the stock exchanges will always reward with share price hikes.

    Similarly with ‘family values’, the straightjacket of capitalism’s marriage-based ‘nuclear family’ cannot comfortably coexist with the reality of polyamory, so philandering adulterers like Robert Miller are publicly lambasted. But like generations of chieftains, patricians, and arisocrats before him, capitalist plutocrat patriarchs such as he use their wealth and power to gain covert access to multiple sexual partners. Again, tacit tolerance of this moral hypocrisy is rife in private, and the only ‘crime’ is getting caught out in public.

    Folk who see beyond the vulgar bourgeois individualism that equates personal net worth with ‘success’ realise that a good life is predicated upon healthy, loving relationships with friends, lovers, family, pets, and the natural world. Early on, Miller admits it’s taken him 60 years to discover that the love and respect of his extended family is more important than all the ‘hard (white collar criminal) work’ he has invested in jacking up his personal net worth. By the end of the film, Miller has:
    • killed his mistress Julie Côte (Laetitia Casta) – though narrowly evaded prosecution for manslaughter;
    • sold his dodgy business to another corrupt businessman – though he’s had his personal net worth expropriated towards charitable works by signing his wife’s separation agreement; and
    • completely alienated his wife and daughter – and by implication his entire extended family.

    So the evil that he’s done (capitalist exploitation + corrupt business practices to get rich, manslaughter of his mistress) DOES catch up with him, in driving an irreparable wedge between him and his only latterly discovered source of an existential good life: healthy, loving relationships. I say hats off to Nicholas Jarecki for delivering a thoroughly satisfying moral critique of decadent capitalism’s endemic economic and personal corruption.

    • June 1, 2013 at 8:17 pm

      Thanks for the support. It was an interesting period which included a sharp exchange of view with Google and direct threats to sue it for failing to clear the malicious DMCA notices promptly. The penultimate notice was cleared as the seven day notice before action ended. Google cut it fine. Even now, my site has still not recovered its traffic although it is improving.

      As an opinion, your critique is great to read. It’s relatively unusual to encounter this level of sophistication and I appreciate you taking the time to set out your point of view. I do not think your analysis represents Nicholas Jarecki’s intention, but I enjoy the idea of imputing it to him. Although there is, to some degree, a price to be paid within the family, Robert Miller can continue his lifestyle with no loss of face. None of the people outside the family who are aware of the fraud will blow the whistle. They all have too much to lose. So even though there will be some reputational damage to Miller within the magic circle, he is free to continue enjoying broad social acceptance, now trading on his wife’s higher profile charitable works. In this I note that the family will also lose wealth and status if they turn in their patriarch for the prosecution he deserves. They become accomplices after the fact, i.e. they are no better than him because they fail to turn him in. They are seduced by their own materialism and are not prepared to risk losing their wealth and status for the satisfaction of seeing “justice” done. As to the homicide, it is not unusual for the wealthy to be able to avoid prosecution and/or conviction. The outcome shown here is not unexpected. It’s simply sad to see his escape presented in such triumphalist style. However, since seeing Arbitrage it has been my misfortune to see two (and a half) other films of dubious morality. The Call has two women cold-bloodedly decide to kill a serial killer. Snitch has a man wreck his new family and throw away his businesses to secure the release of his criminal son from the first marriage. Pain and Gain seems to expect the audience to laugh at incompetent killers as they kidnap, attempt to kill, and kill several people. I hope this is not the start of a new age of cinema where morality becomes mutable to pander to the audience’s worst instincts.

  5. TK
    October 8, 2013 at 7:36 pm

    Why would you want an ending to satisfy a moral desire? It’s completely out of touch with reality imho. These folks almost never get caught. And a filmmaker doesn’t really have moral obligations to show that “good” always will triumph over “evil”. As in this world it is rarely the case. And in no way did it have me cheering for him in the end, though i found myself smiling when he proved the photo was fake. But anyway, it left me thinking for a little while. I just don’t agree that this movie is morally wrong.
    From what I read, you and I most definitely share the same code of ethics, it’s just that I believe a film like this isn’t obligated to fullfill a sense of justice by showing that you will get punished in some way if you become like Mr. Miller. It’s not up to a movie to educate us on what’s morally right or wrong. We need to do this ourselves so that, when we see movies like this, we’ll be able to put our own judgement in, not the filmmaker’s. We have plenty of movies that do just that. This one just leaves it open. Nothing wrong with either. Movies can almost do anything. It’s why they are made: to leave you with feelings and thoughts and bring you perspectives you may otherwise never hear, see or feel.

    I truly respect your opinion. Here I laid out mine. Good luck in getting this site back to normal. What Lionsgate just showed here is ultimate weakness and really, what where they wasting their time on? Bad stuff from LG.

    • October 8, 2013 at 8:44 pm

      Thank you for taking the time to reply. In some ways I agree with you. As a general proposition, there’s no obligation on any creative person to educate the reader or viewer. Except, I would suggest an artist can be considered great when he or she challenges the prejudices of the audience or provokes thought in a constructive way. But to challenge orthodoxy or to provoke a response, the artist must have a point of view. Let’s take as an example a book or film showing a rape. There’s a new Indian film, Kill the Rapist?, directed by Sanjay Chhel, which thematically discusses whether it’s appropriate to have the death penalty for rapists. You may recall the shock and outrage over the December 2012 gang rape in Delhi and the resulting case which has moved more quickly than usual through the courts. This film does not reach a conclusion on whether capital punishment is the right response of the state to protect women. As you say, it’s not for artists to push their own opinions or judgements down the throats of the audience. But it does quite clearly reflect the outrage we should all feel when a person’s body is violated without consent. Like you, I have no problem with a film showing anyone avoiding detection as a criminal. It can be a minor or a serious crime. Film-makers are entitled to show life as it is. Indeed, in the 1970s and 80s, there was a vogue for films showing women victims (and/or their husbands) taking revenge on the men who raped them. The message was that it was morally acceptable for the victims of rape to become vigilantes and suitably maim or kill the rapists. So qualitatively, why should we be offended by films that show people getting away with murder? The vigilante is a murderer because he or she premeditates and plans the death of her attacker. An example earlier this year was The Call where we’re expected to approve the decision of the women to leave the serial abductor to die. Similarly, in Pain and Gain we’re shown kidnappers and murderers in what’s intended as a comedy. Perhaps I’m overly sensitive but I don’t think it’s amusing to be presented with images of incompetent criminals repeatedly failing to kill someone or disposing of severed hands by barbecuing them. Which brings me back to Arbitrage. I felt the director was inviting the audience to applaud the adulterous killer’s escape from justice. He’s shown as exploiting his wealth, status and connections to avoid both the charge of fraud and the consequences of the probable manslaughter. It’s the smile on his lips. He views this as a challenge and a man of his privilege expects to get away with wrongdoing. Such men feel unaccountable for their actions. In India, this leads men to rape women because they know the male police don’t make the investigation of rape allegations a high priority. This American film seems to be saying we should approve men of status avoiding accountability for both monetary and physical crimes. To me, The Call, Pain and Gain and Arbitrage cumulatively suggest a moral vacuum at the heart of American society. This worries me.

  6. AJ
    October 28, 2013 at 10:15 am

    I am really surprised by the reviews here – you completely miss the point of the story. This isn’t a story about good vs evil in the traditional sense and it isn’t really about shades of grey either. If you watch the movie again you will see Miller is a very decent man, cleverly disguised as a villain. That’s the twist and it’s a clever one. Sometimes life is messy and sometimes there isn’t a clear cut choice between good and bad. However, throughout the entire movie Miller tries to minimise the hurt other people would suffer whereas almost everyone else acts purely out of self interest.

    He certainly didn’t kill his mistress as one of the reviews above seems to suggest. It was an accident that could have happened to anyone. And no matter what choice he made at the scene of that accident, people were going to get hurt. However, by running away he protected his investors who otherwise would have lost everything.

    His business certainly wasn’t dodgy – he plugged a gap in the accounts with a personal loan that was repaid out of the proceeds of the sale. And the buyer of the business got exactly what he wanted and for considerably less than he was prepared to pay. Remember too, the first thing Miller did after the sale went through was to authorise a $2m donation to the hospital.

    He looked after his getaway driver, whose father he had also once looked after before he died. He tried to spare his wife from financial ruin and social embarrassment which was clearly important to her and looked after all the other people close to him including an idiot son and a naive, ungrateful daughter who were both set up for the future. Even the fact that he had a mistress turns out to be the outcome of a marriage of convenience.

    Furthermore when it looked like the other guy was going to go to prison he decided to hand himself in – only changing his mind when he thought of a way out for all of them. Whatever way you look at it he really isn’t a bad guy. You may not be a fan of Wall Street but you are really confusing the issues. If there are any baddies in this movie it is the cop who starts off in the pursuit of justice but blatantly falsifies evidence to enhance his career and Miller’s wife, a respected benefactress, who ruthlessly exploits a selfish opportunity for personal aggrandisement. At no point in the story does the main character do anything purely for his own benefit. He makes some difficult choices but looks after everyone else first.

    • October 28, 2013 at 12:13 pm

      Life is endlessly fascinating and, though I may fundamentally disagree with your analysis, I’m glad you voiced it. I’m not going to respond to it detail. From what you write, we’re never going to find common ground. I shall confine myself to two minor points.

      He was driving when the car crashed. As the driver, he would face charges of manslaughter. Think of it this way. If he had been driving carefully, the “accident” would not have happened. A jury would make the decision. It’s a separate offense to flee the scene of an accident and he obstructs the investigation. He puts the man who came to pick him up at risk of jail and pays him for his trouble. The list of offenses continues.

      He controls the accounts in his business, and when he realises one of his “bets” is not going to pay off, he has a problem. So he borrows money and, without declaring its source, balances the books. He knows the business has lost value and conceals this fact. This is fraud. He knows he would go to jail if this was discovered. The man who lent him the money could also go to jail because he knew the illegal purpose. Even the attorney advising him is at risk of losing his right to practice for advising people on how to break the law and get away with it.

      You may view these as purely technical offenses but they are real. You may think Miller a good man but, if he was honest and went to trial on either or both sets of facts, he would probably go to jail. Being a good man does not insulate him from legal liability.

  7. AJ
    October 29, 2013 at 9:53 am

    Yeah, we’ll never agree.

    The hedge fund setting, or whatever, clouds peoples’ judgement. I think this setting was a deliberate choice by the writer – we are meant to dislike this character at the beginning. But most people can never see past that no matter what happens in the rest of the story.

    Actually his ‘crimes’ are victimless. The only person who would have been entitled to feel defrauded – the buyer – lets it pass and completely shrugs it off as an acceptable embellishment. No further action is taken – and remember, these people aren’t well known for their charity/empathy so there is really nothing to see here at all.

    As for the accident – where I come from that would definitely have been treated as an accident unless he had done something serious to contribute to it, such as work double shifts without sleep. Is it really so different in America that an accident is never an accident? I’d be very surprised.

    Sure, he flees the scene – no question that is a crime although no-one suffers as a result but if he didn’t his investors lose everything, a much worse situation.

    The point I am trying to make is everything he does involves taking care of people and protecting them. He rarely thinks about himself and almost turns himself in at the end when it seems there is no other option. On the other hand, the cop affects a concern for justice but in reality falsifies evidence to enhance his career. The wife, who appears totally loyal and devoted but clearly isn’t, exploits the situation for personal gain. Even the daughter is only worried about her brokerage licence, ignoring the investors or anyone else when she finds out about the fraud.

    Nothing you say detracts from the fact that Miller is a fundamentally decent man who tries to make the best of a bad situation even if he technically breaks the law a few times on the way. As for the good guys – his wife, for example, doesn’t break any laws at all – they are mainly motivated by greed and self interest. That’t the twist in this movie and it is a clever one.

    • October 29, 2013 at 11:57 am

      It’s difficult to justify an assertion that causing the death of the passenger in the car you are driving is victimless. The law is very clear. If the driver is reckless whether death is likely to result or grossly negligent, and death results, the driver commits an offence. Here’s a man who knows he’s tired but still risks loss of concentration or falling asleep by continuing to drive. That’s inherently dangerous. You can tell he thinks he’s at risk of prosecution because he flees the scene and tries to cover up his involvement. An honest man reports the accident and goes through the legal process. If the coroner and prosecuting authorities agree this is an accident with no criminal consequences, he walks away without a stain on his character. There may be a civil wrongful death suit from the family of the deceased, but people like Miller carry liability insurance to deal with such claims.

      Why does he run away?
      Because he risks losing control of the fraudulent sale of his business. Facing the possibility of criminal charges and the loss of reputation as an adulterer, he might be forced to step down from the CEO position. With his daughter getting close to the truth, the manipulation of the accounts might become clear.

      What is fraud?
      There has to be dishonesty. Did he know or genuinely believe the buyers would part with their cash if they knew the truth about the company’s finances? Obviously not. If he had had that belief, he would not have felt it necessary to falsify the accounts. So he was dishonest and, through that dishonesty, led the buyers into a course of conduct they would not otherwise have followed. They were victims regardless whether they bought the business or not because they continued to spend money on due diligence and all the necessary fees and charges associated with the takeover. Had they been aware of the losses, they would either have negotiated the price down, or withdrawn from the proposed purchase and cut their losses. They would also have had a cause of action to recover all expenses incurred after the fraud was committed.

      As a model for this liability, look at the Hewlett-Packard acquisition of Autonomy. HP now alleges there was a hole in the accounts. This is exactly the same as the Miller situation. It’s alleged that Autonomy was posting revenue to the accounts before it was received. HP is now being sued by angry shareholders because it failed to do due diligence and bought a company at an inflated price. So in this film, the victims are the buyers and their investors because they bought a company that was not worth the price paid.

      Why was the company not worth the price they paid?
      Because the company had made a loss on a transaction! The value of the company is its current net worth plus future prospects. So having made a loss, the company had a lower net worth than the buyers believed. The loan concealed the loss. There are two ways in which this loss might be made good. The company could earn its way out of the problem, i.e. profit from other transactions slowly replaces lost capital. During this period, the company’s actual trading position is precarious, but it eventually makes good the loss. The problem is that the accounts show all the profit from the individual transactions as free profit, not as cash being used to pay off the loss. So the buyers are deceived as to the actual profitability of the company. Alternatively, the seller does what Miller does. He sells the business on the basis of the fraud and uses most of the purchase price to pay off the loss, i.e. the purchase price replaces the undisclosed loan. So when the buyers have the chance to go through the figures, they realise they bought at an inflated price.

      So why wouldn’t they blow the whistle?
      Before the purchase, the business had a perfect reputation. It still has that reputation. But if it were to become public knowledge that the business had been trading fraudulently and that the buyers failed to find it during due diligence, everyone loses their reputation. That’s why they keep quiet.

      He may be a good man but he’s a crook. Fortunately, he’s selling to people he hopes will not be honest and hide the fraud from their shareholders. HP shareholders are suing their board of directors. That’s what would happen to this set of buyers. Self-interest persuades them to keep the fraud going. Ah yes. They too have to lie about the accuracy of the accounts. That’s the irony. Everyone’s corrupt.

  8. AJ
    November 1, 2013 at 1:17 pm

    “The law is very clear. If the driver is reckless whether death is likely to result or grossly negligent, and death results, the driver commits an offence”.

    It isn’t clear at all in this context – maybe in your country (USA?) but not mine. It depends on the circumstances. The father of a friend of mine died in very similar circumstances and no-one was prosecuted. As far as I know, it wasn’t even considered. With all due respect, you are way off the mark here. I touched on this previously.

    “So he was dishonest and, through that dishonesty, led the buyers into a course of conduct they would not otherwise have followed. They were victims regardless whether they bought the business or not because they continued to spend money on due diligence and all the necessary fees and charges associated with the takeover”.

    And yet the buyers completely shrugged it off. This doesn’t mean a crime wasn’t committed as far as the regulators are concerned (although these people aren’t usually the sharpest tools in the box) but the only party actually entitled to feel defrauded wasn’t remotely bothered. Remember he paid $125m less than he was prepared to pay or something like that – this was well within that margin.

    “HP now alleges there was a hole in the accounts. This is exactly the same as the Miller situation”.

    Not true at all – in Miller’s case the hole was plugged and that is a crucial distinction. The only person who suffered a financial loss was MIller himself – he repaid the money borrowed to plug the hole out of his share of the proceeds.

    “Because the company had made a loss on a transaction! The value of the company is its current net worth plus future prospects”.

    In theory, yes – at least in a nutshell. However, in practice, a company is worth what someone is prepared to pay for it. I used to work in finance and that was the best lesson I ever received.

    Like I said before, we’ll never agree. But it’s really obvious to me that you started with a conclusion and then worked your way back towards a justification that doesn’t really stand up. On the other hand, it is really interesting how perceptions can vary so widely and I respect your argument, however flawed it seems to me.

    • November 1, 2013 at 1:25 pm

      In that case, full of mutual respect, we’ll agree to differ and go our separate ways. It’s been interesting to exchange ideas. If we have any other films in common, we should do this again.

  9. lordship
    December 6, 2013 at 5:58 pm

    Just watched this movie on DVD in the UK (didn’t get a theatrical release over here) and unfortunately by the end I felt like I was watching the Pilot to a Damages type TV series – it wasn’t just the moral ambiguity of Gere getting off but also the corruption of the Tim Roth cop faking the number plate evidence and the Nate Parker character being morally corrupted by the money offered by Gere that really left the ending so empty and needing to be concluded in some way. OK everyone in this film is immoral, Susan Sarandon for covering up for her husband in return for a fortune in divorce settlement, Gere’s daughter for not turning him in et al This movie is completely without redemption, it’s vacuous, it has good production values and plays well with Gere’s darkside but ultimately it leaves a very empty feeling that demands a boxset.

    • December 6, 2013 at 9:56 pm

      As of today’s date, Arbitrage has taken $35,485,056 at the international box office. It seems there’s a market for Richard Gere and the other named stars even though the film itself is, as you say, without redemption and vacuous.

  10. January 7, 2014 at 12:17 pm

    Twas sort of petty of lionsgate to send you a cease and desist. judging by your review, the movie evoked a very BIG response out of you which is what any production company should want.

    • January 7, 2014 at 1:04 pm

      With respect, petty is not the right word. Lionsgate made a commercial decision to try to shut the whole site down. If too many people read bad reviews like mine and did not go to see the film, the loss would have been substantial, so all vulnerable sites had to be attacked. In my case, this meant an attack not just on the one page, but on a significant number of other pages to create the illusion of copyright infringement and lead Google to blacklist the site.

  11. Jenny
    February 3, 2014 at 12:00 am

    Glad I watched this movie and then discovered your site, I will return frequently! Just watched it last night and I enjoyed reading your discourse above. At the end of the movie I had the feeling that Miller dodged several bullets, but not so much that we were to be rooting for him to do so. I do see AJ’s point that many of Miller’s actions he was thinking not just of himself but of others such as his investors. However, some of his biggest decisions he was definitely only thinking of himself: Driving his mistresses car when he was sleepy on a deserted road, then calling Grant to come pick him up. Why not call his lawyer? Deep down, he knew Grant was expendable, so that was his first instinct to call someone who was outside his immediate circle. Definitely a selfish move. Also at the end, my thought was “This is how they play the game” Think of all the people that were in that room applauding. How many of them made deals just like Miller did, had relationships based just on money, prestige, power. I didn’t feel as though the director was wanting us to root for people like this no matter how likeable Richard Gere is. It was a classic tragedy, he won but he really lost – lost his wife, his mistress, his daughter and relationships he claimed were important in the beginning of the movie. So ultimately his victory was a selfish one. I really enjoyed the movie and the performances, Richard Gere is excellent in these kinds of roles.

    • February 3, 2014 at 3:30 am

      Thanks for taking the time to produce such a detailed reaction. It’s always good to have thinking people contribute no matter whether they agree with me.

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