Buffett's Heir Destroyed Himself

The hardest-working executive Buffett ever saw. Positioned to inherit Berkshire Hathaway. Destroyed his future for 0.1% of annual income.

Author

Jordan Belfort
January 30, 2026

👋 Good Morning. He was inheriting a $500 billion empire. Then he made a $3 million trade. The SEC cleared him. Berkshire erased him.

Read time: 3 minutes | 645 words

STORY 

🎯 The $3 Million Mistake That Cost Everything

David Sokol was the chosen one.

Warren Buffett called him the hardest-working executive he'd ever seen. "He gets more done in a day than probably I get done in a week, and I'm not kidding," Buffett told Fortune.

Sokol turned around failing Berkshire businesses. He led MidAmerican Energy's explosive growth. He rescued NetJets from operational disaster. He spotted BYD before it became the world's top electric vehicle seller.

The board loved him. Buffett praised him publicly. Investors assumed he'd inherit one of the world's most valuable companies.

Then in early 2011, everything collapsed in weeks.

The Trade

Berkshire bought chemicals company Lubrizol for $9 billion in March 2011. Sokol suggested the deal.

Then it emerged: Sokol had purchased $10 million in Lubrizol shares two months earlier. His stake gained $3 million when the acquisition was announced.

He resigned immediately. Buffett initially said the trades weren't a factor, claiming Sokol wanted to manage family investments.

Later that year, Berkshire's audit committee released a report calling Sokol's trading a violation of "the highest standards of business ethics."

At the annual meeting, Buffett expressed bewilderment. Sokol made $24 million that year. He didn't need the extra $3 million.

"Dave did not disguise the trading, which, you know, that's somewhat inexplicable," Buffett said.

The SEC investigated. No charges were filed.

Sokol's attorney criticized Berkshire's treatment, saying Buffett knew about the Lubrizol ownership.

None of it mattered. The damage was permanent.

The Aftermath

Sokol is 69 now. He lives in Fort Lauderdale in a $19.9 million home. He runs Teton Capital, managing several hundred million dollars of personal wealth.

He has had almost no contact with Berkshire since leaving.

When Greg Abel officially became CEO this month, Sokol sent an email: "Greg Abel is an extraordinary executive who in my opinion is far more talented than I am and is at the correct age for such a challenge. I wish him nothing but great success."

Fourteen years of distance distilled into three gracious sentences.

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INSIGHT

⚖️ When Perception Becomes Reality

Technical legality doesn't protect reputation. The SEC cleared Sokol. Berkshire's audit committee still destroyed him.

This reveals something brutal about elite institutions. The higher you climb, the more unforgiving the standards become.

Sokol didn't break securities law. He broke something more important: trust.

Buffett built Berkshire on a simple principle: reputation takes a lifetime to build and five minutes to destroy. Sokol embodied that principle until he didn't.

The $3 million gain wasn't the issue. Sokol made $24 million that year. He didn't need the money.

The issue was judgment. Why would someone positioned to inherit a $500 billion company risk everything for a 0.1% bump in annual income?

Buffett couldn't explain it. Neither could anyone else.

Elite organizations don't just fire people for violations. They erase them. Berkshire removed Sokol's audit committee report from online archives. The message: he never existed at this level.

ACTION

🔍 Your Conflict Audit

Most professionals underestimate how conflicts of interest appear to others. Time to audit your exposure.

Map your potential conflicts:

  • Where do personal investments overlap with professional decisions?

  • Which relationships could appear compromising even if they're innocent?

  • What benefits do you receive that might raise questions?

Evaluate through external eyes:

  • If this appeared in the Wall Street Journal, how would it read?

  • Would your explanation sound defensive or transparent?

  • Could someone reasonably question your judgment?

Build protective protocols:

  • Disclose early and often, even when disclosure isn't required

  • Recuse yourself from decisions where conflict might exist

  • Document your reasoning before taking actions that could be questioned

MEME