What about his remark that if he had to do it over again, he would have still bought the shares but not suggested it to Buffett? That’s terrible. Buffett thought he could trust this guy.
Just goes to show when you make a mistake it’s best to own up to it. Sokol should have just said, “It was a lack a judgement on my part and I should have known better. I’m sorry if my actions let anyone down.” But no he has too much vanity to do that. Just look at Andy Petitte and Giambi vs Clemons and Bonds.
The more I think of it, the more it seems that Sokol was wrong - legally & ethically. More anecdotal evidence to suggest that the comment was left to be a passing comment only. Pretty stupid on the part of Sokol, because he has lost more. But, greater damage has been done to WB, by actually saying what he said. It’s probably still not too late for him to take further steps. I spoke to friends and clearly most places have a compliance system around staff trading. The regulator here also has clear rules around this. Surprising and sad that such a large player in capital markets (BRK) does not have a formal staff holdings/ trading declaration system. It seems it does not fall into definition of an AMC, yet it’s main activity is equity investment in businesses. Does BRK fall under any of the SEC rules?
It’s main activity isn’t equity investment, it’s insurance. Not an investment company.
Palantir Wrote: ------------------------------------------------------- > It’s main activity isn’t equity investment, it’s > insurance. Not an investment company. Ok. So is it regulated by an insurance regulator? I know IRDA has clear clause on staff trades.
Palantir Wrote: ------------------------------------------------------- > It’s main activity isn’t equity investment, it’s > insurance. Not an investment company. I can only assume you’re now trolling us. Stop it.
ChickenTikka Wrote: ------------------------------------------------------- > > Don’t worry though cfa-Bombay, in India > front-running your boss and clients is totally > ethical so long as it benefits you, and by > extension your family :-). So are theft, murder, > and bribery. >^ right on Palantir, in South Asia it’s unethical not to make as much money as possible. Ha Ha ! Your confidence in the above statement makes my right brain go “Aha ! that’s the reason why he is here … in India” and then my left brain adds “Ainvayi !”
You got it!
http://dealbook.nytimes.com/2011/04/05/the-private-equity-parallels-with-buffett/?nl=business&emc=dlbkpma1 “. . . private equity deal-makers argue that if the same fact pattern involving Mr. Sokol was perpetrated by an executive at one their firms, the story would end very badly.” “When DealBook asked several lawyers about these facts — replacing Berkshire with Blackstone — they all said this would likely form the basis of an insider trading charge. (They also say that under the insider trading laws, it would not matter whether Blackstone ultimately acquired the industrial company.)” “What also perplexes private equity deal-makers about the Sokol situation is that Berkshire did not seem to have the proper procedures in the place to protect against this. Buyout firms like Blackstone, Kohlberg Kravis Roberts and the Carlyle Group have strict compliance rules regarding personal trading by company executives.”
Bump. To whoever is in doubt (I expect a limited few anyway) about Sokol, see example 9 on page 129-130 of book 1. (level 3)