On November 9th local time, according to ProPublica, a non-profit news media, Buffett traded stocks of his Berkshire Hathaway company that he was currently or was about to buy and sell in his personal account, and he himself claimed that this practice had a conflict of interest.
ProPublica cited confidential data leaked by the US Internal Revenue Service (IRS) stating that in the quarter before or during which Berkshire purchased or sold stocks, Buffett, known as the "Oracle of Omaha," also traded the same stock through his private account. These stocks include Wells Fargo, Johnson&Johnson and Wal Mart.
Buffett has publicly stated that he attempts to avoid investments involving Berkshire when it comes to personal accounts. I cannot purchase the stocks that Berkshire is currently purchasing, "he said.
CNBC and MarketWatch interviewed Berkshire about the news exposed by ProPublica, and currently Berkshire has not responded to media requests for comment.
As early as 2011, Berkshire also faced a rare scandal due to personal trading issues. David Sokol, a former director of Berkshire, resigned after engaging in personal stock trading, and Berkshire ultimately determined that this action violated its insider trading policy.
At least $466 million of shares will be sold in about 20 years, involving Wells Fargo Bank, Johnson&Johnson, Wal Mart
ProPublica claims that the data it obtained from the US Internal Revenue Service includes Buffett's personal transactions for approximately twenty years. And these records show that the most famous and respected investors in this country sometimes say one thing in public and do another in private - Buffett has traded the same company's stocks through his personal account at least three times during the quarter or prior to Berkshire's purchase or sale of stocks, and before Berkshire disclosed the trading to the public.
It is worth noting that the records obtained by ProPublica only include the securities sold by Buffett and do not include the securities he purchased and held.
The report states that these transactions not only violate Buffett's own Berkshire ethical policy, which requires "all actual and expected securities transactions by Berkshire" to be publicly disclosed before Berkshire employees trade stocks, but also contradicts his previous public statements.
ProPublica states that between 2000 and 2019, Buffett sold at least $466 million in personal stocks. For example, in April 2009, Buffett sold $20 million worth of Wells Fargo stock in his personal account. Meanwhile, Buffett repeatedly praised Wells Fargo in an interview with Fortune magazine, and Berkshire is already one of Wells Fargo's largest shareholders.
In October 2012, Buffett sold Johnson&Johnson stock worth $35 million. According to the documents submitted by Berkshire at the time, it also sold shares in Johnson&Johnson. ProPublica believes that the document does not disclose the future situation, which means that Berkshire will sell millions of shares in the next two quarters, which contradicts Buffett's personal sale with Berkshire's policies.
In addition, Buffett's actions in August 2009 also raised questions for ProPublica. At that time, Buffett sold $25 million worth of Wal Mart shares through his personal account, while Berkshire almost doubled its shareholding in Wal Mart in the same quarter.
Based on this, ProPublica questions why Buffett made a choice for his investment portfolio and the opposite choice for Berkshire investors? If he knows that Berkshire has taken or is considering taking action and is still trading, Buffett will once again risk violating the company's insider trading policy.
CNBC and MarketWatch both interviewed Berkshire on this news, and currently Berkshire has not responded to media requests for comment.
Buffett has repeatedly stated that he will avoid personal account convergence trading
According to reports, Buffett has publicly admitted that he has a private account that is independent of Berkshire's $300 billion stock investment portfolio, but its content has always been a closely guarded secret.
Berkshire is required to disclose its holdings to the Securities and Exchange Commission (SEC) on a quarterly basis, but the amount and size of Buffett's private account holdings remain largely a mystery.
Alice Schroeder, the biographer of Buffett, stated in an interview with ProPublica that Buffett exposed her to almost every person and thing in his life, with the exception of his personal investment record.
According to the report, Buffett has publicly stated that he attempted to avoid investments involving Berkshire when it comes to his personal account. I cannot purchase the stocks that Berkshire is purchasing, "he said, as doing so would create a" conflict of interest ". At the 2016 Berkshire shareholders' meeting, Buffett stated that most of his funds were invested in Berkshire stocks, rather than his personal account.
In fact, in 2011, personal trading issues sparked a rare scandal at Berkshire Hathaway.
David Sokol, a former director of Berkshire, resigned after engaging in personal stock trading, and Berkshire ultimately determined that this action violated its insider trading policy. According to reports, Sokol recently purchased a $10 million stake in Berkshire's acquisition of chemical company Lubrizol, which brought him a profit of $3 million. Sokol himself denied that his trading was improper, stating that his departure from the company was not related to the purchase of Lubrizol stock.
When the media believed that the Sokol incident could damage Berkshire's reputation, Buffett came forward to defend the company's personal trading policies to ensure compliance with these rules. The problem doesn't appear in the rules, the problem is that people violate the rules, "he said." Our responsibility is to find them. "Buffett explained that employees who hold Berkshire's subsequent investments for a long time are different from those who buy shares at the same time as Berkshire (Sokol's situation belongs to the latter).
When asked if Berkshire's trading methods could pose a potential risk of preemptive trading, Buffett said, "I have never seen it before, and I currently have no evidence of such a thing