He's a billionaire celebrated the world over for a decades-long record of prescient stock picks balanced by a refreshingly humble demeanor. But even legendary investor Warren Buffett, 79, has had his share of questionable calls and clear mistakes -- many of which he's freely admitted.
"He is genuinely free of arrogance," said Alice Schroeder, a former managing director at Morgan Stanley and the author of "The Snowball: Warren Buffett and the Business of Life."
Most recently, the purchase of Burlington Northern Santa Fe Corp. railroad by Buffett's Berkshire Hathaway company has drawn the scrutiny from the Securities and Exchange Commission. The SEC is reviewing how Berkshire informed Burlington shareholders of its plans to buy a $26 billion majority stake in the railroad, according to a report by the Wall Street Journal.
Neither the SEC nor Buffett have commented publicly on the subject and it's unclear whether anything will come of the SEC review. But Buffett has had run-ins with regulators in the past that did cast a shadow, at least temporarily, on his company. Below, we take a look at these and other notable lowlights in a career and life that is the envy of Wall Street.
Today, Buffett's name is practically synonymous with that of his company, Berkshire Hathaway. But if Buffett could travel back through time to address one longstanding regret, Berkshire Hathaway might have never become part of the Buffett universe.
What today is a holding company began as a Massachusetts-based textile manufacturing firm. Buffett acquired a majority stake in the firm in 1965 and in the decades that followed, bought and folded other businesses under the Berkshire umbrella, creating the powerhouse it is today.
But even as Berkshire grew, its underlying textile business lost money. Its mills were eventually closed, resulting in massive layoffs. Buffett found it all "quite painful," Schroeder said.
"I would have been better off if I'd never heard of Berkshire Hathaway," Buffett once said, according to "The Snowball."
In 1975, the SEC launched an investigation of Blue Chip Stamps, a company in which Buffett had a major stake, to determine whether Blue Chip committed fraud in its purchase of another company, Wesco Financial, a savings-and-loan business. Buffett was subpoenaed and at one point, was at risk of being named in an SEC consent decree -- a finding of wrongdoing by the commission -- Schroeder said.
The SEC ultimately charged Blue Chip a $115,000 penalty but the commission did not name Buffett in its finding, allowing him to avoid what otherwise could have been a major black mark on his reputation, Schroeder said.
Buffett invested $358 million in USAir in 1989, impressed by the airline's profitable record. He later would admit that he overlooked the fact that the company's costs could prove a huge liability in the increasingly-competitive, unregulated airline business. The airline crashed into the red shortly after Buffett's investment and lost more than $2 billion in four years.
"A friend once asked me: 'If you're so rich, why aren't you smart?'" Buffett wrote in a 1996 letter to Berkshire Hathaway investors. "After reviewing my sorry performance with USAir, you may conclude he had a point."