April, 27, 2010

When Warren Buffett, the world's most famous investor, plunked money down to buy preferred shares in Goldman Sachs and GE during the worst of the financial crisis, he insisted on getting a little something extra for his troubles.In return for making his highly publicized investments, Mr. Buffett demanded the companies give him warrants to buy their stock as a sweetener to clinch the deal.The example was not lost on the U.S. Treasury, which also asked for warrants when it later bought bank preferred stock as part of its controversial bailout of the financial industry.

Now, investors are getting an opportunity to buy the Treasury's warrants and mirror Mr. Buffett's approach. Over the next few weeks, the Treasury is auctioning off warrants it received in return for investing in a number of top-tier banks, including Wells Fargo & Co., Comerica Inc. and PNC Financial Services Group. The government has already sold those it held in JPMorgan, Bank of America, and Capital One Financial, and will likely sell warrants of dozens of other banks – it holds the securities in about 240 institutions – over the next few years.