Buffett Gets to Keep His Secrets, Legally

According to the

, Warren Buffett was able to take advantage of some S.E.C. small print to withhold information about acquisition of a 5.5 percent stake in IBM

. The article, written by Andrew Sorkin, seems to imply that the SEC does not normally allow investors to keep secrets, but makes exceptions for major players like Buffett. The story follows Monday's news of Buffett's IBM stake. Obviously, Buffett did not just buy the shares overnight. Sorkin alleges that Buffett has been working on the deal for eight months, but kept the details secret. According to the article, “You wouldn't have known that if you had been studiously reading Berkshire Hathaway's filings — known as 13Fs — in which companies must disclose stock holdings. There was no mention of I.B.M. in Berkshire's quarterly filing in April, nor in August. Instead, if you were looking carefully, you might have found an odd footnote that said: ‘Confidential information has been omitted from the form 13F and filed separately with the commission.'” Apparently, this is just the latest example of Buffett taking advantage of an obscure rule that reads that the S.E.C., “may prevent or delay public disclosure of form 13F information for public interest reasons or the protection of investors.” The question, then, is what has Buffett done wrong? Has he not simply read the S.E.C. rules more thoroughly than anyone else? Warren Buffett has not gotten to where he is by skim reading important documents.