Case Ends Against Buffett's Ex-Aide .

[fareastwarriors]

David Sokol, the former Berkshire Hathaway Inc. executive who resigned in 2011 amid questions about his stock purchases, won't face any enforcement action from the Securities and Exchange Commission, his lawyer said Thursday.

 

The SEC had been investigating trades made by Mr. Sokol, once considered a possible successor to Berkshire Chief Executive Warren Buffett, ahead of Berkshire's purchase of chemicals company Lubrizol Corp. Barry Levine, Mr. Sokol's lawyer, said he was informed the SEC had wrapped up its investigation and decided not to take action.

 

"There has been a thorough legal analysis and factual scrutiny, and the SEC has concluded, as we have always maintained, that David Sokol never did anything wrong," Mr. Levine said.

 

A spokesman for the SEC declined to comment. The SEC has filed more than 160 enforcement actions for alleged insider trading in the past three years as part of a broad government probe. The SEC doesn't disclose how many investigations it closes without filing charges.

 

The determination lifts at least some of the cloud that has hung over Mr. Sokol since his abrupt exit from Berkshire Hathaway nearly two years ago. The executive resigned after it came to light that he had recommended Berkshire buy Lubrizol, a company in which he had just invested, raising questions about Berkshire's internal controls and its succession plans.

 

Mr. Sokol, who ran Berkshire's MidAmerican Energy unit, long has maintained that he did nothing wrong. But Mr. Buffett, who worked closely with Mr. Sokol for a decade, at the time called the stock purchases "inexplicable" and "inexcusable." He told shareholders in 2011 that Mr. Sokol violated the company's insider-trading rules and code of ethics.

 

Mr. Levine said Mr. Sokol never violated Berkshire's policies. Mr. Buffett couldn't immediately be reached Thursday for comment.

 

At issue was Mr. Sokol's purchase of about $10 million worth of shares of Lubrizol, a stake that rose in value by about $3 million when Berkshire agreed to buy the company. The SEC began investigating the investment shortly after Mr. Sokol resigned from Berkshire. Mr. Buffett said at the time Berkshire had turned over "very damning evidence" about the purchases to the SEC.

 

 

 

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