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Fri Jan 4, 2013, 05:44 AM

SEC won't file insider-trading charges against David Sokol, lawyer says

Source: Omaha World Herald-NYT

The Securities and Exchange Commission has decided not to file insider-trading charges against David L. Sokol, a one-time top lieutenant at Omaha-based Berkshire Hathaway, Sokol's lawyer said Thursday.

Sokol came under scrutiny in 2011 after abruptly resigning as chairman of Berkshire's MidAmerican Energy Holdings, one of the many holdings of the investment conglomerate run by the billionaire Warren Buffett.

At the time, Berkshire revealed that Sokol bought shares in Lubrizol, a maker of lubricants that he wanted Buffett to buy. Sokol bought the shares two months before Berkshire announced a $9 billion acquisition of the company. After the deal was announced, the value of his Lubrizol stake rose by $3 million.

Sokol's lawyer, Barry W. Levine, said that the SEC informed his client Thursday that it had decided not to pursue any charges related to the trades.

FULL story at link.


Read more: http://www.omaha.com/article/20130103/NEWS/130109814/1685#sec-won-t-file-insider-trading-charges-against-david-sokol-lawyer-says

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Reply SEC won't file insider-trading charges against David Sokol, lawyer says (Original post)
Omaha Steve Jan 2013 OP
Javaman Jan 2013 #1
naaman fletcher Jan 2013 #2
DallasNE Jan 2013 #3

Response to Omaha Steve (Original post)

Fri Jan 4, 2013, 11:15 AM

1. so what else is new? nt

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Response to Omaha Steve (Original post)

Fri Jan 4, 2013, 11:25 AM

2. It wasn't actually insider trading

 

Insider trading would be "I know Buffet is going to buy this because of insider knowledge I have, so I will buy first".

What this guy did was "This is a cheap company, I will take a stake and then try to sell it to buffet".

In that case he violated an ethical duty to buffet, but he didn't make money on inside information.

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Response to Omaha Steve (Original post)

Fri Jan 4, 2013, 01:05 PM

3. To A Lay Person This Looks Like An Open And Shut Case

The fact that the SEC says there is insufficient evidence simply points to serious flaws regarding insider trading that need to be addressed. One of Sokol's primary jobs was to make investment recommendations to Buffett. While Buffett didn't simply rubber stamp those recommendations the odds were high that the recommendation would be accepted otherwise there was no purpose in having Sokol working in that capacity, hence my view that this should have been an open and shut case. Time to tighten up the insider trading rules.

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