It has been widely reported, and as Reuters is reporting, that Warren Buffett now feels David Sokol deceived him and broke the law. The Wall Street Journal is reporting that this apparently serious enough for the Board of Directors of Bershkshire Hathaway is considering filing a lawsuit against David Sokol. For David Sokol what appears to the be the most problematic is the revelation that he
Tag: Mason Kirby
A Berkshire Hathaway (BRKB) shareholder is suing Warren Buffett, David Sokol and Berkshire in connection with Sokol’s decision to invest in Lubrizol (LZ) and then recommend to Buffett that Berkshire buy the company. Bloomberg reported that investor Mason Kirby is suing for damages in connection with Sokol’s trade and the subsequent damage to Berkshire’s reputation. On March 31, Buffett announced that Sokol was resigning to spend time with his family, while also explaining that Sokol had bought shares in Lubrizol before recommending it to Buffett. Berkshire eventually bought the chemical company, resulting in a substantial gain for Sokol on his shares. David Sokol’s personal investment into Lubrizol was approximately 9 million dollars with about a 3 million dollar profit after Warren decidedly bought the company for 9 billion dollars.“Sokol knew that Buffett would closely consider and likely take his recommendation,” Kirby said, according to Bloomberg. “As a result of Sokol’s unethical behavior, Berkshire suffered significant reputational losses and other damage.” “Kirby went on to allege that Buffett and Sokol were “working in concert” and “put the company at risk for a potential adverse SEC action and negative credit rating.”
Berkshire Hathaway’s Board of Directors Report on David Sokol
Thanks to our friends at the Wall Street Journal I found a copy of Berkshire Hathaway’s Board of Directors Audit Committee Report on David Sokol’s trading in the shares o Lubrizol. A copy of the report can be found here: http://online.wsj.com/public/resources/documents/Berk_Board.pdf
I am going to read through the report, the Berkshire Memo on Insider Trading and be back with my comments in the next day or so. I’ll let you know what I think happened and what I think lies in store for Mr. Sokol.
A Little Bit More on Warren Buffett, Berkshire Hathaway, and David Sokol
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/
Mason Kirby (on Behalf of Berkshire Hathaway) v. David Sokol and the Berkshire Board
Thanks to our friends at Bloomberg we have found we have found a copy of the Mason Kirby lawsuit over the David Sokol, Lubrizol trades. A copy of which can be found here: http://media.bloomberg.com/bb/avfile/r3SCX27MJMSg
I’ll be back later with some additional comments once I have had a chance to read the complaint in greater detail.
A Look at David Sokol’s Trades and The Fallout
It has been a couple of weeks since Warren Buffett’s startling announcement that David Sokol bought shares of Lubrizol for his personal account ahead of Berkshire’s acquisition of the company. For a time it looked like Warren’s efforts to get out in front of the issue with the press had been successful. However, last week Reuters reported on April 19th, that “Berkhire, Buffet Sued Over Sokol’s Trades.” I thought that now might be a good time to take a look at Mr. Sokol’s activity, what he has done wrong, and