David Sokol worked at Berkshire Hathaway for legendary investor Warren Buffet, who is renowned not only for his investment skills but also for his ethics. Bankers suggested to both Sokol and the CEO of Lubrizol that the company might be a good buy for Brekshire. Sokol then found out that the CEO of Lubrizol planned to approach Berkshire about a possible acquisition. Sokol purchased $10 million worth of Lubrizol stock before recommending Lubrizol to Buffett. Sokol mentioned to Buffet "in passing" that he owned shares of Lubrizol.

Buffet did not ask any quesitons about the timing or amount of Sokol's purchases. Sokol made $3 million profit when Berkshire acquired Lubrizol.

Did Sokol violate insider trading laws? Did he behave ethically? What are Buffet's ethical obligations?