I totally have bought something from vendors simply because their salesmanship was so good and I knew the wares were a bit overpriced. We just enjoyed how they did it and the sales process.

David: The way it goes down is, through their work in commencing the board and the family that owned most of Wesco, they convinced them to drop the merger. When the merger dropped, the Wesco stock fell, of course. That's when Warren and Charlie invest, but they feel bad about tanking the stock price.

They worked out a deal with the company with the family that they'll buy shares and invest. I can't remember if it was at the merger price or maybe even slightly above. The Feds are like, wait a minute, there's got to be some shady going on here because (a) you scuttled the merger, (b) you then could’ve just bought the stock for lower but you paid this artificially high price. What's going on?

Ben: Every other time we're investigating someone, what they ended up doing was buying the stock as cheap as possible after they precipitated an event that made the stock price fall.

David: They're very confused. Warren ends up getting subpoenaed and testifies that they paid the price they did because, "It was important how Wesco management feels about it." Now you can say, 'Well, we own the controlling interest so it doesn't make any difference.' But Louis Vincente, who is the president of Wesco, doesn't really need to work for us. If he felt that we were slobs or something, it just wouldn't work."

Munger, when he's testifying, of course, invokes, who else but Ben Franklin in his testimony. He says, "We didn't feel our obligation to the shareholders was inconsistent with leaning over backward to be fair. We have that Ben Franklin idea that the honest policy is the best policy. It had sort of a shoddy mental image to us to try to reduce the price."

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