This weekend saw the annual Berkshire Hathaway shareholders meeting. Obviously the hot topic of conversation; David Sokol. So, I thought I would take a few quick minutes to comment on some of the recent items in the press and items posted to our main site.
The Wall Street Journal reports that Warren Buffett claims David Sokol misled him: http://blogs.wsj.com/deals/2011/05/01/warren-buffett-on-david-sokol-no-question-he-misled-me/
It appears that following those remarks by Buffett, David Sokol’s attorney decided to issue a statement defending Sokol, and criticizing Buffett and Berkshire Hathaway. http://blogs.wsj.com/deals/2011/04/30/david-sokol-defends-himself-against-warren-buffett/
While I will be the first to admit I am not always a fan of Warren Buffett, I think getting into a war of words with Warren is a very stupid idea.
According to the United Kingdom’s Telegraph, Warren Buffett admitted he made a big mistake in not asking Mr. Sokol more questions about his purchase of Lubrizol shares. I’ll easily chalk this self-admitted mistake on Buffett’s part up to the fact that he trusted David Sokol to avoid doing anything wrong. In fact, as Buffett said “When someone says to me ‘ I own the stock’ it doesn’t seem to me like he bought it last week,” it’s somewhat the logical conclusion that unless it was disclosed that they just bought it one would assume they had held it for awhile and it was a long term holding for which there would not be a potential problem. Furthermore Buffett went on to say “I don’t think there’s any question about the inexcusable part. Dave violated the code of ethics, Dave violated our insider trading rules.” Seems pretty clear cut to me.
The full article can be viewed here: http://www.telegraph.co.uk/finance/newsbysector/banksandfinance/8485664/Warren-Buffett-admits-big-mistake-over-David-Sokol.html