Sokol's Trades: Timeline of Lubrizol Deal
NEW YORK (TheStreet) -- David Sokol's resignation from Berkshire Hathaway (BRK.B) and the disclosures that Sokol, one of Warren Buffett's top lieutenants, was actively trading in shares of a company that recommended to Warren Buffett as a potential acquisition, has raised questions and eyebrows about the fine line Sokol walked in his Lubrizol deal involvement.
On Dec. 21, Sokol sold 2,300 shares of Lubrizol which he had bought a week earlier, a sale he said was done for tax planning purposes to match a tax loss, Sokol said on CNBC on Thursday.
On Jan. 5, 6 and 7, Sokol bought 96,060 Lubrizol shares as part of a 100,000-share order he had placed with a $104-a-share limit order.
Lubrizol shares ranged between $101.74 and $105.25 during the Sokol trading days. Berkshire's acquisition values Lubrizol at $135 a share.Buffett and the Berkshire Hathaway board approved the deal on March 13 and announced it the next day. Buffett said on March 19 he learned the specifics trades Sokol had made in Lubrizol shares. Buffett said of the series of Lubrizol trades made by Sokol, "Dave's purchases were made before he had discussed Lubrizol with me and with no knowledge of how I might react to his idea. In addition, of course, he did not know what Lubrizol's reaction would be if I developed an interest. Furthermore, he knew he would have no voice in Berkshire's decision once he suggested the idea; it would be up to me and Charlie Munger, subject to ratification." The role that Sokol played in ultimately bringing Warren Buffett and Lubrizol CEO James Hambrick to the table during a time when he bought a significant Lubrizol stake is the focus of the insider trading debate. What follows is a timeline of Sokol's key role in the Lubrizol deal leading up to the Buffett and the Berkshire board taking over the process and ultimately agreeing to acquire Lubrizol for $9 billion. -- Written by Eric Rosenbaum from New York.
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