Crony capitalism bailout induced dementia may be a bitch but it sure does put things on the fast track. Specifically, from "Neither Dave nor I feel his Lubrizol purchases were in any way unlawful" to "the Sokol situation is inexplicable and inexcusable" in thirty days. Ignore the fact that Buffett both "explained" and "excused" it when he first announced it hoping that would be the end of course. After all who would dare disturb the kindly old Octogenarian of Omaha atop his perch, after he himself made billions off the backs of taxpayers, the same people his sidekick Munger who did precisely the same illegal frontrunning when he bought a boatload of BYD (oddly nobody brought that one up yet: we are confident it is being saved for the Too Bit To Fail launch party at the Museum of Mirrors) told should only buy gold if they believe the country they live in is going to kill them. We wonder if Munger has seen the price of gold lately, and if that to him is any indication of the genocidal inclinations of said host country. As for the demented one, who ended his letter with: "I have held back nothing in this statement. Therefore, if questioned about this matter in the future, I will simply refer the questioner back to this release" we wonder: now that the validity of that statement has been thoroughly refuted by none other than grandpa Warren, whether he would like to revise it, and if so, can he absolutely, definitely guarantee us that his heir apparent (not to mention Munger) was the only one who would frontrun Berkshire on corporate acquisitions in the past? We promise to believe him this time.
Warren Buffett said he had made a mistake by not asking more about David Sokol's purchases of Lubrizol Corp stock while his former top lieutenant was pitching the chemicals company as a possible takeover target for Berkshire Hathaway Inc.
Sokol was widely considered a leading candidate to succeed Buffett as Berkshire's chief executive, but he resigned last month after it was revealed that he had bought $10 million of shares in Lubrizol. Sokol got a roughly $3 million profit on that stake when Berkshire agreed to buy Lubrizol.
The U.S. Securities and Exchange Commission is probing Sokol, a person familiar with the matter has said, and the controversy has put Buffett's management style into question.
Speaking on Saturday to shareholders from the stage at Berkshire's annual meeting in Omaha, Nebraska, Buffett said he should have probed more deeply when Sokol first revealed in January that he owned Lubrizol stock.
This was after Sokol had spoken with Citigroup Inc bankers about Lubrizol, and two months before Berkshire agreed to buy the chemicals company for roughly $9 billion.
"I obviously made a big mistake by not saying, 'Well when did you buy it,'" Buffett told shareholders. He called the Sokol situation "inexplicable and inexcusable."
In a scathing report, a committee on Berkshire's board this week found that Sokol deliberately misled Buffett about his Lubrizol investments, and that his "misleadingly incomplete disclosures" violated his duty to be candid.
It also said some of Sokol's responses to Buffett's questions about the stake appeared "intended to deceive."
"I think that for reasons that are laid out in the audit committee report, I don't think there's any question about the inexcusable part," Buffett said.
And since this whole affair has now passed way beyond damage control, we can't wait to see just what skeleton falls out of David Sokol's sleeve next...