This post appeared earlier Wednesday on RealMoney. Click here for a free trial, and enjoy incisive commentary all day, every day.
OK, enough is enough with this innocence thing. I am talking about the new revelations about ex-Berkshire Hathaway (BRK.A) honcho David Sokol and his apparent knowledge of an upcoming bid before he bought 100,000 shares of Lubrizol (LZ). I am also talking about the ridiculous defense that Raj Rajaratnam is putting up that he was worried about his $600 million in custody at Goldman Sachs (GS) during the bad days of 2008.
This makes me want to go for that prosecutor's job again, like I did in 1983 -- the one for which Rudy Giuliani rejected me because I had a B+ average at Harvard Law.
Look, you have to realize how stupendously pathetic the protestations of "not guilty" are in these two instances. Sokol and Warren Buffett have decided that Sokol is innocent -- well, whoop-de-do. Last time I checked, unless we live in the U.S. of Berkshire Hathaway, that's up to the prosecution.The idea that it might in any realm be legal that Rajaratnam should get information about a Buffett infusion into Goldman's coffers -- which is perhaps the single most inside material information imaginable from a board member -- and trade on it is just preposterous. He's worried about his custodial account. He finds out about an infusion that will save the firm and he buys ahead of it? They have nothing whatsoever to do with each other. Now, for some real truth. I don't know these guys' lawyers but here is what I believe they are telling their clients. In Sokol's case: "We are really in trouble here, but let's just presume innocence and buffalo the prosecution into thinking this is business as usual." In Rajaratnam's case, it goes like this: "You are so guilty it is astounding. Your goose is totally cooked. So we might as well try anything."
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