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In 2007 or 2008, an unnamed investment bank begins laying off a large number of employees. Among those affected is Eric Dale, head of risk management. Dale's attempts to speak about the implications of his current project are ignored, but he gives a flash drive containing his work to Peter Sullivan, a junior analyst in his department. Sullivan, intrigued, works late to complete Dale's model.

Sullivan discovers that the assumptions underpinning the firm's present risk profile are wrong; historical volatility levels in mortgage-backed securities are being exceeded, which means that the firm's position in those assets is overleveraged and a decline in their value large enough to cause the firm's bankruptcy could occur in the near future. Sullivan urges his colleague, Seth Bregman, to return to work with head of credit trading Will Emerson; Emerson in turn summons Sam Rogers, his boss, after reviewing Sullivan's findings. Attempts by the four to contact Dale end unsuccessfully, due to his company phone having been shut off.

A subsequent meeting of division head Jared Cohen, chief risk management officer Sarah Robertson, and other senior executives concludes that Sullivan's findings are accurate, and firm CEO John Tuld is called. Upon Tuld's arrival, after Sullivan explains the problem, Rogers, Cohen, and Tuld spar regarding a course of action. Cohen's strategy, favored by Tuld, is a fire sale of the problematic assets, but Rogers points out that this will have significant negative effects on the broader market, in addition to destroying the firm's present trading partnerships. Tuld counters that such effects are likely to occur in any case and stresses his desire to avoid them regardless of the cost.

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