Abrupt Resignation of Potential Warren Buffett Successor Raises Questions

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March 31, 2011

Kass goes to say that while "Sokol is a loss to Berkshire ... there are several equally qualified replacements for the oracle. Moreover, I have long thought that Sokol's frequent requests to retire from the company suggested it was unlikely that he was going to replace Buffett. ... That said, Mr. Buffett is not going anywhere for now."

Recent market activity suggests other investors agree with Kass. After trading down by as much as 3.5 percent Wednesday night, Berkshire stock has rebounded a bit.

Reports suggest that the Security and Exchange Commission is said to be reviewing Buffett's press release and considering whether to launch an investigation into Sokol's actions. It's an issue legal experts say is tough to break down.

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Does this violate Berkshire's internal corporate guidelines for stock purchases? Should those guidelines be changed if, in fact, Sokol's acts were not in violation, especially given Buffett's rule of thumb: "I want employees to ask themselves whether they are willing to have any contemplated act appear the next day on the front page of their local paper -- to be read by their spouses, children and friends -- with the reporting done by an informed and critical reporter."

Sokol the Talk of the News

If Sokol had not asked himself that question before his purchase of more than 96,000 shares of Lubrizol in January, he is surely asking it this morning, as his name is on the front page of most every newspaper, and is the talk of business television networks.

Here is the transcript from his interview this morning on CNBC's Squawk Box.