Berkshire Fined $896,000

[Parsad]

Related to their conversion of USG convertible debt to shares:

 

http://finance.yahoo.com/news/berkshire-pay-896-000-fine-164431886.html

 

About 24 minutes of net earnings!  ;D  Cheers!

 

 

[rpadebet]

A 100 years from now, the opportunity cost of this is going to really really hurt :-\. It maybe even close to today's BAC settlement by then.

[augustabound]

The transaction occurred four days after the FTC decided not to punish Berkshire for a similar "inadvertent" violation involving financial services company Symetra Financial Corp....

 

Love the quotes the writer put around inadvertent.

 

 

[randomep]

Related to their conversion of USG convertible debt to shares:

 

http://finance.yahoo.com/news/berkshire-pay-896-000-fine-164431886.html

 

About 24 minutes of net earnings!  ;D  Cheers!

 

It's ok it's tax deductable.

[Guest longinvestor]

I can already see another headline "Is Corporate HQ at Omaha too lean to run a $300 B company?"

[west]

Related to their conversion of USG convertible debt to shares:

 

http://finance.yahoo.com/news/berkshire-pay-896-000-fine-164431886.html

 

About 24 minutes of net earnings!  ;D  Cheers!

 

It's ok it's tax deductable.

 

I thought fines weren't?

 

[bookie71]

I thought fines weren't?

ditto

http://www.nolo.com/legal-encyclopedia/business-expenses-that-are-never-deductible.html

[rpadebet]

I can already see another headline "Is Corporate HQ at Omaha too lean to run a $300 B company?"

 

Almost there...

http://www.bloomberg.com/news/2014-08-22/buffett-s-lapses-highlight-growing-pains-with-compliance.html

[Guest longinvestor]

I can already see another headline "Is Corporate HQ at Omaha too lean to run a $300 B company?"

 

Almost there...

http://www.bloomberg.com/news/2014-08-22/buffett-s-lapses-highlight-growing-pains-with-compliance.html

 

LOL

 

My headline should have said "Is Corporate HQ at Omaha too lean and trusting to run a $300B company?"

 

At the AGM this year, Munger spoke a lot about the trust thing at Berkshire. Buffett chimed in by saying that with over 300K employees, someone will behave badly but the benefit of trust at Berkshire far outweighs the exceptions. Obviously the meddlers at NYC don't understand this language.

 

All that said, this reporting issue is something even I can fix by having an Outlook Calendar for such things. Surely, one of the 24 HQ employees at Omaha can handle this!

[Kraven]

I can already see another headline "Is Corporate HQ at Omaha too lean to run a $300 B company?"

 

Almost there...

http://www.bloomberg.com/news/2014-08-22/buffett-s-lapses-highlight-growing-pains-with-compliance.html

 

LOL

 

My headline should have said "Is Corporate HQ at Omaha too lean and trusting to run a $300B company?"

 

At the AGM this year, Munger spoke a lot about the trust thing at Berkshire. Buffett chimed in by saying that with over 300K employees, someone will behave badly but the benefit of trust at Berkshire far outweighs the exceptions. Obviously the meddlers at NYC don't understand this language.

 

All that said, this reporting issue is something even I can fix by having an Outlook Calendar for such things. Surely, one of the 24 HQ employees at Omaha can handle this!

 

For the life of me I don't understand what trust has to do with it. A company has various legal and regulatory obligations. The fact that Berkshire runs their business with few corporate employees at HQ doesn't excuse this. The buck stops there not with an employee even if at one time that employee owned the subsidiary. 

 

If getting a pass because you're supposed to be able to trust your employees is a valid argument why doesn't the same rationale apply to say Jamie Dimon with the whale episode or even BAC with Countrywide?  In the former case granted the desk wasn't a subsidiary per se, but that is semantics. In the latter, it is a subsidiary no different from any of Bekshire's and the events occurred prior to BAC owning them.

 

[Liberty]

I'd be curious to compare how many fines and regulatory problems Berkshire had against other companies worth 100s of billions... I doubt zero is a realistic number for any of them.

[augustabound]

I'd be curious to compare how many fines and regulatory problems Berkshire had against other companies worth 100s of billions... I doubt zero is a realistic number for any of them.

 

Other companies problems don't make the new like Berkshire does either.

[bookie71]

Nobody has ever goofed up before.  They admitted the mistake and moved on.  What's not to like.

[Liberty]

I'd be curious to compare how many fines and regulatory problems Berkshire had against other companies worth 100s of billions... I doubt zero is a realistic number for any of them.

 

Other companies problems don't make the new like Berkshire does either.

 

Exactly. "GE fined a million bucks for some paperwork thing" is not something anyone will click on, but "Buffett screws up" gets the eyeballs.

[Guest longinvestor]

I can already see another headline "Is Corporate HQ at Omaha too lean to run a $300 B company?"

 

Almost there...

http://www.bloomberg.com/news/2014-08-22/buffett-s-lapses-highlight-growing-pains-with-compliance.html

 

LOL

 

My headline should have said "Is Corporate HQ at Omaha too lean and trusting to run a $300B company?"

 

At the AGM this year, Munger spoke a lot about the trust thing at Berkshire. Buffett chimed in by saying that with over 300K employees, someone will behave badly but the benefit of trust at Berkshire far outweighs the exceptions. Obviously the meddlers at NYC don't understand this language.

 

All that said, this reporting issue is something even I can fix by having an Outlook Calendar for such things. Surely, one of the 24 HQ employees at Omaha can handle this!

 

For the life of me I don't understand what trust has to do with it. A company has various legal and regulatory obligations. The fact that Berkshire runs their business with few corporate employees at HQ doesn't excuse this. The buck stops there not with an employee even if at one time that employee owned the subsidiary. 

 

If getting a pass because you're supposed to be able to trust your employees is a valid argument why doesn't the same rationale apply to say Jamie Dimon with the whale episode or even BAC with Countrywide?  In the former case granted the desk wasn't a subsidiary per se, but that is semantics. In the latter, it is a subsidiary no different from any of Bekshire's and the events occurred prior to BAC owning them.

 

The trust thing was mentioned in the article, I was merely quoting the article.

“These are some of the growing pains that come from having a trust-based culture in a world that requires compliance procedures,” Brian Tayan, a researcher at Stanford Graduate School of Business who has studied Berkshire’s governance, wrote in an e-mail. “Shareholders have to make the assessment of whether these filing violations matter to them.”

 

[Guest longinvestor]

I'd be curious to compare how many fines and regulatory problems Berkshire had against other companies worth 100s of billions... I doubt zero is a realistic number for any of them.

 

Other companies problems don't make the new like Berkshire does either.

 

Exactly. "GE fined a million bucks for some paperwork thing" is not something anyone will click on, but "Buffett screws up" gets the eyeballs.

 

Exactly also.

 

Also the amount of trust is not common. There is the mantra of trust but verify I've often heard in my career in the corporate world, the verify part has stuck but the trust is all but absent.

 

The guys at Bloomberg who wrote this story probably heard the same message I did at Omaha about the trust thing. They just interpret it differently.

 

 

[frugalchief]

Man, that $896k would be worth hundreds of millions if not billions in a few decades!  Maybe he will make it up by buying USG...