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Buffett Finally Falls Off His High Horse

Stocks in this article: LZ BRK.B

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NEW YORK ( TheStreet) -- Say it ain't so, David Sokol!

On days like this, I feel like a barefoot boy outside the dugout of the Chicago White Sox (or a courthouse, or wherever it was), waiting for Shoeless Joe Jackson. Has David Sokol besmirched the only truly unspoiled, clean, revered, even liked exponent of American capitalism, his sanctified boss Warren Buffett?

Is Berkshire Hathaway (BRK.B) now the financial equivalent of the Black Sox, forever sullied?

I guess it is, if you were foolish to believe that it was a sully-free zone in the first place. What the Sokol affair demonstrates is that there is not even a scintilla of ethics left in finance, if there ever was any. If you expected to find ethical purity at the House of Warren, you were looking in the wrong place. It's just not part of the territory.

Now, let's be clear on something. Sokol is not going to the hoosegow over this. He didn't take bribes from Arnold Rothstein to throw the Money Management World Series of 1919. All he did was buy shares in Lubrizol (LZ) before pitching it to his boss, who then went ahead and bought it.

Hey, he wasn't boss of Berkshire. All he could do was recommend deals to Buffett, just as you and I could by picking up the phone and calling him, I guess. See? No problem. Nothing to interest the regulators, as Sokol points out less than convincingly. (Insider trading happens to be a particular fetish for prosecutors nowadays.) And besides, revered Buffett deputy Charlie Munger owned 3% of BYD Inc. before he "asked me to go look at it," as he said on CNBC. Doesn't that prove it's OK? The implication is that this is pretty much par for the course over in Omaha.

Listening to these somersaults and pirouettes, I came away with a certain feeling of satisfaction. It's now unanimous. Wall Street, including the branch office in Omaha, has no shame. Zero. Sarbanes-Oxley requires that public companies disclose their codes of ethics, if they have any (codes, that is). I think that's silly. Are you going to write a code of ethics for people whose job is to make money any way they can, no matter how obnoxiously?

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