The data seem clear on David Sokol’s conflict of interest in the Berkshire/Lubrizol deal. He bought shares in Lubrizol, and then encouraged Berkshire to buy the company. He claimed that because he didn’t know whether Berskhire would follow his recommendation he didn’t have inside information. But he clearly had information that the public didn’t have — that the probability of the acquisition was elevated. The far more interesting question from our standpoint is why Warren Buffett, known for his embrace of ethical business practices, failed to understand the unethicality of Sokol’s actions when he learned of them, and intervene. Had Buffett suddenly gone over to the dark side? Or, as Berkshire portrayed the story, did Buffett do absolutely nothing wrong?