Buffett Cancer Insider Trading

I’m sure lots of people have seen the news about Buffett having some non-life-threatening prostate cancer. Would it have been against insider trading laws for Buffett’s doctors’ to have bought some puts when they found out?

I would say yes, since it’s undisclosed material news.

I say yes as it is material information

Just as devil’s advocate… Non-Life Threatening = Material?

Also, the Doctor isn’t bound by CFA ethics. He likely has no fiduciary obligation to Berkshire Hathaway (though that may not necessarily be true). However, according to this SEC document, it says something about having an “other relationship of trust and confidence” that being someone’s Doctor could fall under.


i think doctors fall under a even stricter ethical standard…there must be something in their practice that says they cannot profit from information they get from clients regarding their condtion

From my experience, doctors seem to have pretty lose standards in business ethics. They don’t seem to have a problem pushing certain drugs, overprescribing tests, or referring patients to treatment centers where they have personal stakes. I’m sure the “do what is best for the patient’s health and confidentiality” standard is pretty strong, but I doubt that they have duty to “preserve the integrity of financial markets”, or stuff like that.

Maybe someone else has a better perspective.

Well, if it can be shown that the doctor acted on this information and made profits by it (for example, he knew it was terminal, bought a bunch of ATM puts after the tests had been done and made a killing on the news once it was released), then it would be legally actionable as insider trading, over and above a physician’s ordinary duties to patients.

However, a non-terminal diagnosis is harder to play correctly, and that muddies the case.

My sense, though is that unless the trade size is eggregious and blatantly obvious, the SEC would consider the doctor too small a fry to be worth prosecuting anyway.

This. I’m not even sure the do what is best for the patient ethic is that strong. Medicine is a business. *Stops self from going on anti-healthcare rant* Phew, that was close…

I vote no, it’s not insider trading. The Buffett camp is clearly trying to spin it as non-material. You can’t have it both ways – either it’s material and should move the stock or it’s non-material.

I think there was an episode of House this season where he makes some investment based on his patient’s health.

Buffet is going to live til at least 100…so don’t worry…i’m worried if Charlie Munger goes…i have seen a lot of his interviews so if you got some top secret stuff do share…

Even if Buffett chokes on his hamburger and cherry coke tomorrow, it won’t be a problem for Berkshire. Their management team is too deep and too decentralized to be hurt by Buffet’s being gone.

I honestly don’t understand how buffet hasn’t died of diabetes with all that Cherry Coke. He’s a really unhealthy looking guy even for an 80+ year old.

Doctors can basically do anything, except for fuck their patients. That’s a big deal. Totally against the rules. When my brother was in Med School (Yes, Blake the same one that signed the prenup at his rehearsal dinner) they had a legal consultant come and give them a lecture on how not to get in trouble. The guy giving the lecture was a washed up drug addict ex doctor.

LOS for this, basically Doctors can be drug addicts, drunks, all sorts of bad, but banging your patients = loss of medical license. This guy did all sorts of terrible stuff with drugs and prescriptions, but it wasn’t until he fucked a patient that he lost his license. Things that piss off your patients get you in trouble.

As for trading on your patients cancer diagnosis. That’s definitely all sorts of wrong ethically, but since when does the SEC actually get around to prosecuting anyone? The entire market is insider trading on a day to day basis.

I can’t tell you how many analysts I know that throw little hints at their buddies from time to time in advance of a recommendation and get the same thing back. Nobody is dumb enough to write it down or even say it outright like those assholes at Galleon, but come on, how could you not think this thing isn’t being gamed day in day out? The “Mosaic” theory is vague enough to pretty much cover everyone’s ass.

What if an HTB gives Buffet AIDS and tells her friends.

Is that insider trading?

Doctors can’t be drug addicts and practice (at least not indefinitely). I have an uncle who did this.

Or, I should say, you can be a drug addict if it doesn’t affect your performance on the job, but if you’re an addict, pretty much by definition it will affect your performance on the job. His colleagues noticed and he was put on probation and had to submit to random drug tests for a long time. If I remember, he did not always pass and eventually lost his license.

But the real thing that doctors can’t do is not pay their taxes. That’s ultimately what finished him off.

I feel sorry for my uncle, but he did it to himself, and he had many many people willing and able to help him recover.