Please explain to me how this isn't insider trading...
Let me get this straight...David Sokol, who many believe is the #2 man at Berkshire Hathaway goes to a meeting with Citi where they propose that Lubrizol would be a good acquisition target for the company that he is one of the top people at.
He then has them schedule a meeting with Lubrizol's CEO immediately after which he purchases ten million dollars worth of the company's stock.
Sokol then suggests to Warren Buffett that Berkshire Hathaway should consider buying the company that only a few days before he bought ten million dollars worth of stock in.
Buffett professes not to be interested at first, so clearly this wasn't a stock that was on his radar until after Sokol brought it to his attention.
Berkshire buys Lubrizol and Sokol pockets three million bucks profit in a matter of weeks.
Really? Is it just me, or does this whole situation certainly look a whole lot worse than what Martha Stewart went to prison for? What is Sokol's problem. I'm sure that he makes huge bucks. He theoretically could have even been Buffett's successor and made even more money and he goes and pulls a stunt like this. Really? Some people are just too greedy. I'm sure that most of my fellow CAPS players would be happy making a tenth of what Sokol pulls in annually. How did he ever think that he would get away with this? If the SEC doesn't look really closely at this issue there's something really wrong here. I watched Sokol's interview on CNBC this morning and I was very shocked at his attitude. He had absolutely no remorse. I suppose that could be his defense strategy, but still. If he honestly doesn't think that he did anything wrong then he has quite a sense of entitlement. What a mess.
Ultimately, this probably will have very little impact upon Berkshire Hathaway though. Yes, they are clearly losing a good manager, but I doubt that they would have trouble finding someone who is very, very talented to take his place. With the stock down less than two percent this morning, this really can't even be viewed as a buying opportunity. BRK's stock would have to take a huge knock before I would be really interested in it. As an individual investor, I'm looking for opportunities that present more upside potential than a behemoth like Berkshire. Yes, I own some large cap companies in my portfolio, but they all pay dividends and have one or many catalysts that can potentially unlock hidden value at some point in the future.