Imagine you’re next in line to run a $200 billion empire.
You are the trusted lieutenant, the fixer, the man who can do no wrong in the eyes of your legendary mentor, Warren Buffett. You’ve earned your place through grit, intelligence, and a ruthless drive to succeed.
This was David Sokol’s reality. And then, for a profit of just $3 million, he threw it all away.
This is the story of the man who was almost king.
The Golden Boy of Omaha 🏆
For years, David Sokol was Buffett’s secret weapon. When a Berkshire Hathaway company was in trouble, Buffett sent in Sokol.
He was the turnaround artist who transformed MidAmerican Energy into a powerhouse. He was the corporate surgeon who saved the luxury jet service, NetJets, from the brink of financial collapse, turning massive losses into profits.
His reputation was ironclad. He was disciplined, brilliant, and seen by everyone on Wall Street as the leading candidate to succeed the Oracle of Omaha himself. He was at the pinnacle of the corporate world.
The Fatal Bet 💰
In late 2010, Sokol’s eyes landed on a chemical company named Lubrizol. He saw a perfect acquisition target for Berkshire Hathaway.
But here, at this crucial moment, his ambition curdled into greed.
Before he ever mentioned the name Lubrizol to Warren Buffett, he made a secret, massive bet for himself. He quietly invested $10 million of his own money, buying up shares in the company he was about to recommend.
He was now front-running his own boss.
The Pitch and the Payday 🤯
With his personal stake secured, Sokol went to Buffett and made the pitch. The logic was sound, the numbers worked, and Buffett trusted his protégé.
In March 2011, Berkshire Hathaway announced it was acquiring Lubrizol for $9 billion.
The market roared, Lubrizol’s stock soared, and David Sokol personally cashed out with a cool $3 million profit. The trade took less than three months. It seemed like the perfect play.
The Fall from Grace
Shortly after the deal was announced, Sokol abruptly resigned. He tried to control the narrative, claiming his departure was planned for months and had nothing to do with the Lubrizol deal.
But the truth had a way of coming out.
A bombshell report from Berkshire Hathaway’s own audit committee exposed the full story. It was a brutal, systematic takedown of his defense. The report concluded that Sokol had intentionally misled Berkshire and violated the company’s clear insider trading policies and code of ethics.
It wasn’t a misunderstanding. It was a calculated betrayal of the very principles, trust and integrity, that Buffett had built his entire empire on.
The Legacy
The fallout was absolute. The SEC launched an investigation, and the man once destined to run the world’s most respected company saw his legacy incinerated overnight.
David Sokol’s story is a Wall Street tragedy. It’s a timeless cautionary tale about how a lifetime of achievement can be undone in a single moment of greed. It serves as a stark reminder that reputation is priceless, and that for some, the temptation of a quick profit can end up costing them everything.