WSJ:
Former Berkshire Hathaway Inc. executive David Sokol had harsh words for his onetime mentor, billionaire investor Warren Buffett, the day after Mr. Sokol was notified he wouldn't face regulatory action for his trading activities.
Mr. Sokol was once seen as a potential successor to Mr. Buffett, but his shot at running the Omaha, Neb., conglomerate ended with his resignation in March 2011 amid disclosures he had personally purchased stock in a chemicals company not long before recommending that Mr. Buffett buy it.
Mr. Buffett had praised Mr. Sokol's contributions to Berkshire upon the executive's departure and said he didn't feel the trades were "in any way unlawful." But weeks after the resignation, the Berkshire Hathaway CEO made scathing remarks about Mr. Sokol's actions, calling them "inexcusable" and "inexplicable" and saying they violated the company's code of ethics.
Mr. Sokol's lawyer said Thursday that he was informed that the Securities and Exchange Commission wouldn't take action against his client.
In a sign that the rift is unlikely to heal soon, Mr. Sokol on Friday lashed out at the 82-year-old Mr. Buffett.
"I will never understand why Mr. Buffett chose to hurt my family in such a way, but given that he is rapidly approaching his judgement [sic] day I will leave his verdict to a higher power," Mr. Sokol wrote in an emailed response to The Wall Street Journal.
At the time, I argued that "It's hard to see how what Sokol did qualifies as insider trading under SEC Rule 10b-5." So I'm not surprised the SEC decided to give him a pass.
On the other hand, I also argued that Sokol likely had breached his fiduciary duties to Berkshire Hathaway: "Sokol would have state agency law problems even if he escapes, as I think he will, inside treading liability." So I don't have much sympathy for Sokol's whining about Buffett's criticisms, which strike me as on the mark.
