The former trader - who has been estranged from Lindsay for a number of years - believes she needs to stop working on the movie project, entitled 'Inferno', because of its dark storyline concerning the porn star.
He said: "Why would a girl of Lindsay's calibre stoop to doing a movie about a stripper who was a porn Queen who got raped by seven executives at one time and wound up dying? How dark is that?
"What father would want to see his daughter in that kind of position?
"The best thing for Lindsay would be to step back and not do anything for a while."
The 50 year old also hopes Lindsay's mother Dina - from who he is required to stay 100 feet away from - quits in her role as her manager so she can work on being a good parent.
He said: "The best thing in the world is if Dina got out Lindsay's life as a manager, and if she was just a mother."
Michael believes the 'Mean Girls' star's relationship with Dj Samantha Ronson caused problems in her life because her work environment was not helpful for someone with addiction problems.
He told The Sunday Times magazine: "Samantha worked as a DJ. She was out at clubs every night, around drinking and drugs, and that's not the environment Lindsay needs to be in.
"Before, Samantha was only making $2,500 a gig. When Lindsay was around she was making as much as $25,000 a gig. But the real problem was their relationship was toxic. They were fighting all the time. She's 10 years older than Lindsay too."