Thursday, March 31, 2011

Did Sokol Do Anything Different Than Buffett?

Top  Berkshire Hatahway exec David Sokol resigned under a cloud of suspicion after it was learned that he bought stock in Lubrizol, just before advising Buffett to takeover the company.

It can be argued as to whether this specific type of insider trading is ethically questionable, but a Wall Street trader emails:
Sokol only did what Buffet did, as he invested in GE, GS, while advising U.S.
Actually, I believe the situation was worse in Buffett's case. As Buffett notes in a letter/press release, Sokol could not know for sure if Buffett would actually go along with the takeover deal. When Buffett bought into GE and GS, I suspect he knew that the U.S. Treasury was coming in right behind him.


  1. Who was hurt by what Sokol did? I keep hearing that his actions were unethical and possibly illegal, but nobody can show me a victim.

  2. It could be argued that Sokol could have presented Lubrizol in the best possible light to Buffett becasue he had incentive to get the takeover done. Remember, Sokol had to go to Buffett twice before Buffett got warm to the acquisition.

    What Sokol did is not a crime in my book, but depending on the understanding that Buffett and Sokol had, if I was Buffett I might be pretty pissed.

  3. Blatant conflict of interest. Sure, there's a victim. He's treating his client (Buffett) like a mark, not a client.

    What you think of Buffett as a bankster crony is another thing.

  4. Exactly. What Sokol did was not bright but in no way unethical or illegal (man-made laws created by retarded/parasite voters and their political terrorists). What Buffett did was terrorism against the American people/taxpayer. Buffett is a taxtaking/politcal terrorist-supporting parasite and more people are coming to realise this.

  5. I'm not buying that it's a conflict of interest. I work for an investment firm, and everybody on our investment committee has to report all sales and purchases of securities over $1000. Berkshire should have internal controls to get these types of "conflicts" out in the open, especially from executives that may have input into the firm's investments.