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Warren Buffett’s Heir Apparent Steps Down

By JLP | March 31, 2011

Interesting front page article in today’s WSJ about Davod Sokol, Warren Buffett’s heir apparent to head Berkshire Hathaway, stepping down. Why? Because he invested in Lubrizol right before Berkshire bought the company. From the article:

Mr. Buffett said Mr. Sokol, 54 years old, had bought 96,060 shares in January, before Berkshire reached a $9 billion deal to acquire the company. Berkshire’s purchase price of $135 per share meant that Mr. Sokol’s stake rose $3 million in value.

Interesting.

What I found really interesting was this quote from the article:

“Mr. Buffett said he and Mr. Sokol didn’t feel the Lubrizol purchases were ‘in any way unlawful.’”

Maybe not but it sure looks bad.

Topics: Business News | 5 Comments »


5 Responses to “Warren Buffett’s Heir Apparent Steps Down”

  1. tom Says:
    March 31st, 2011 at 9:36 am

    Well… Buffett couldn’t exactly admit to anything.

    If he said it was something he didn’t agree with, his stock goes down.

    If he admits to impropriety, his stock goes down and he faces an SEC investigation.

    Sounds like he really got screwed. Although, this Sokol guy walks away with $3M, big deal. He could have made $3 billion if he stayed. His loss.

    Who was this Sokol guy anyway, it seems that Buffett can choose anyone in the world and he chooses a guy who turned around NetJets? Big deal. Seems like Buffett could do a lot better than this shady character, especially when he’s been looking to leave for 3 years!

  2. The Fire Finder Says:
    March 31st, 2011 at 12:27 pm

    Yea it does. I respect Warren Buffet but this looks like insider trading to me. However, he did step down from taking over so at least he didn’t make it look like he made the decision and then took over. On the other hand, with him stepping down it does look like he made the trade, got millions, and is leaving. Who knows.

  3. tom Says:
    March 31st, 2011 at 3:30 pm

    I retract my previous statement.

    Sokol bought MidAmerican Power and turned it form a $28M company into an $11B company. That is impressive.

    There is more to this story that Buffett and Sokol aren’t saying.

  4. BG Says:
    March 31st, 2011 at 3:45 pm

    “There is more to this story that Buffett and Sokol aren’t saying.”

    This is classic insider trading. Does anyone believe that you can turn a 30% profit in two weeks, and have no impropriety going on?

    The SEC needs to start anal-probing audits when these shenanigans are found out.

  5. Evan Says:
    April 1st, 2011 at 9:55 am

    I wonder if it is worth investing in Sokol’s eventual company…he is a mini-Buffett but has some insider trading problems on his hands!

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