April 13, 2011 -- Professor Lynn Stout commented on potential insider trading charges being filed against Berkshire Hathaway's former executive David Sokol for the way he handled Berkshire's efforts to acquire Lubrizol Corp. while buying stock for himself. Her comments appear in a Reuters article.
"Is there a substantial likelihood that the reasonable investor would find it important? The possibility of an acquisition does not have to be a certainty or even a near-certainty for it to be material," said Lynn Stout, a professor at the UCLA School of Law.
"The issue isn't 'did Sokol know something that Buffett didn't know,' the issue is 'did Sokol know something that the public shareholders of Lubrizol didn't know,'" she said, adding that the case fell into the "Wild West of insider trading doctrine" and was tough to judge until the full sequence of events was known.
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