I am profoundly disappointed that the Audit Committee of
Berkshire Hathaway would authorize the issuance of its report to
the public without the care and decency to ask even a single
question of Mr. Sokol. Mr. Sokol had been associated with the
Berkshire Hathaway companies for 11 years. During this time, his
indefatigable efforts helped create enormous value for the
Berkshire shareholders. He deserved better. While I take issue with
much of the Committee's report, I briefly make the following
points. If the Audit Committee had asked, it would have learned
that:
Mr. Sokol had been studying Lubrizol for personal investment
since the summer of 2010; such investments are specifically allowed
by his employment agreement.
Mr. Buffett was told twice, not once, about Mr. Sokol's
ownership of Lubrizol stock before Mr. Buffett engaged in any
discussions with Lubrizol.
Contrary to the Audit Committee's statement, Mr. Sokol's
Lubrizol shares were not acquired pursuant to a "100,000 limit
order." Rather, they were purchased as a result of several limit
orders, over a period of days, at specified prices, for the day
only, in order to acquire the stock at low prices. At that time,
Mr. Sokol had no reason to anticipate that Mr. Buffett would have
any interest whatsoever in Lubrizol.
I have known Mr. Sokol and have represented his companies in
business litigation since the mid 1980s. I know him to be a man of
uncommon rectitude and probity. He would not, and did not, trade
improperly, nor did he violate any fair reading of the Berkshire
Hathaway policies.