Ace billionaire investor Warren Buffett traded stocks in his personal account on at least three occasions before his company Berkshire Hathaway bought or sold the same stocks, a ProPublica investigation has claimed.
A massive trove of tax information obtained by ProPublica, covering thousands of America’s wealthiest individuals, revealed what’s inside the billionaires’ bag of tricks for minimising their personal tax bills – sometimes to nothing.
Buffett privately traded in stocks that Berkshire Hathaway was buying and selling.
“Buffett has long said such trading would be a conflict of interest, and Berkshire policies prohibit it. But confidential records show that, on at least three occasions, he sold millions of dollars of shares in stocks that Berkshire was trading,” the report mentioned.
Buffett, the legendary investor known as the Oracle of Omaha, repeatedly sang the praises of Wells Fargo in an interview with Fortune.
The bank, Buffett said, “has come closer” to an effective business model “than any other big bank by some margin.”
The interview was published on April 20, 2009.
Banks were still reeling from the financial crisis and stock markets were turbulent.
“It was Buffett who had proposed the idea that turned into the $250 billion federal bailout that had propped up America’s banks (including Wells Fargo),” the probe revealed.
By April 24, Wells Fargo shares had jumped 13 per cent. That day, Buffett privately sold off $20 million worth of Wells Fargo shares in his personal account.
Over the years, Buffett has been unequivocal about one aspect of his personal portfolio: He has repeatedly said he steers clear of trading stocks that his company is trading.
“I can’t be buying what Berkshire is buying,” he has said.
Doing so, he stated on another occasion, would pose a “conflict” of interest.
“But roughly two decades of Buffett’s personal trades were included in a leak of IRS data obtained by ProPublica. Those records show that the nation’s best known and most respected investor has sometimes said one thing in public and done another in private,” the rpeort mentioned.
On at least three occasions, Buffett has traded stocks in his personal account in the same quarter or the quarter before Berkshire bought or sold shares of the same companies, doing so before the conglomerate’s moves were disclosed to the public.
These trades may violate Berkshire’s ethics policies, authored by Buffett himself, which require “all actual and anticipated securities transactions of Berkshire” be publicly disclosed before Berkshire employees can trade the stocks personally, the investigation added.
Overall, Buffett’s records show he reported at least $466 million in personal stock sales between 2000 and 2019.
In October 2012, Buffett made another noteworthy personal trade.
Over several days, he sold $35 million worth of Johnson & Johnson shares.
At that point, Berkshire had effectively revealed that it, too, had sold Johnson & Johnson shares.
“In another instance, in August 2009, Buffett appeared to move, in his personal portfolio, in the opposite direction of Berkshire’s portfolio. He sold $25 million of Walmart stock in his personal account, even as Berkshire almost doubled its stake (which had previously held steady for 15 quarters) during the same quarter,” according to the report.
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