NEW YORK (Reuters) - Executive former Berkshire Hathaway, David Sokol deliberately misled Warren Buffett when an investment for him, the company's Board concluded in a scathing pitch report that may add fuel to probe dry the unique heir of Buffett's pending.
The Committee said that he could pursue Sokol to retrieve 3 millions of dollars of trading profit made when Berkshire purchased chemicals company Lubrizol Corp. and may seek damages from him for harm to the reputation of the company. The company will cooperate with a probe of Government in the matter as well.
The U.S. Securities and Exchange Commission is pushed Sokol, a person familiar with the matter said Wednesday.
Sokol high-profile attorney challenged the Council's report and said that his client is "a man of probity and uprightness rare."
"I have known Mr. Sokol and represented its companies in litigation since the mid-1980s, said Barry Levine of the Washington firm Dickstein Shapiro." He would not and did a not improperly, trade nor he did any reading Berkshire Hathaway policy objective. ?
Levine, who worked for the former Sokol Weather energy company, co-leads the Dickstein white-collar criminal defense practice and has also represented Ronald Reagan attempted assassin John Hinckley.
The report is an unusual statement of a Commission which has always been very close to Buffett, who is CEO and President. It can begin to meet the demands of shareholders waiting Buffett to settle the controversy to the annual meeting of the company, Omaha, Nebraska this weekend.
Buffett has already said that he would have nothing to say about the actions of Sokol, a position which becomes untenable over time, account taken of intense pressure on the conglomerate.
The report paints a picture of Buffett as having been duped by Sokol. However, one shareholder said that it was designed also to exempt Buffett of wrongdoing.
"This report clearly look like this was not without Warren Buffett, this is the fault of the Sokol," said Michael Yoshikami, Executive Director of fortune YCMNET managers advisors and a shareholder of Berkshire. "It really is an effort here to clarify that not Warren Buffett behavior in any way, it is the behavior Sokol."
WIN AT RISK
Buffett announces the resignation of Sokol March, noting that Sokol purchased shares of Lubrizol before suggesting to Buffett than buy Berkshire company. Although Sokol mentioned in the buffet in the "passage" that he held a stock of Lubrizol, Buffett said that he only later found that Sokol held shares in Lubrizol nearly 100,000 approximately $ 10 million.
Sokol made a profit of about $ 3 million - a gain which may be at risk. The Berkshire Board, stated that he was still contemplating legal action against Sokol to, among other things, retrieve all commercial profits, it is.
"It hardly seems that Berkshire is trying to turn the wagons to protect Sokol," said Francis Pileggi, Fox Rothschild LP associated Wilmington (Delaware). "If I had my druthers, I would rather represent Berkshire in this case that Sokol in a Delaware Court.".
In addition to civil recovery potential, Board of Directors of Berkshire also said he would cooperate with any investigation of the Government. A spokesman for the Securities and Exchange Commission declined to comment on.
Said legal experts that Sokol appears to have problems more now that was first thought.
"I believe that Mr. Sokol has a real problem here," said Professor of law, the Duke University James Cox. "Is not a close call at all."
FALLEN HEIR
Sokol, who used to run subsidiaries of Berkshire Weather and NetJets, was widely seen as the heir of Buffett's, Buffett image a biographers tell the "Oracle of Omaha" cultivated.
Yet Sokol, in his a public appearance since the scandal, told CNBC that he had no aspiration to employment. In the Declaration on Wednesday, Berkshire said that Sokol reiterated as well to before Buffett Buffett announced the resignation of Sokol.
When Buffett made the announcement, he said that he believed that Sokol had not done something illegal. The Wednesday statement seems to suggest otherwise.
"Its misleadingly incomplete disclosures to senior management of Berkshire Hathaway on these purchases violated the duty of candour to the company," the Commission said - noting that duty the Executive of sincerity was part of the duty of loyalty under Delaware law where Berkshire is incorporated.
Board of Directors of Berkshire also said some of the answers given to Sokol buffet in response to questions about the nature of his possessions seems "referred to deceive."
In total, the statement of 18 pages uses variations on the word "violation" approximately 11 times.
The Audit Committee held three meetings this month to discuss the report.
The members of the Audit Committee are Chairman Thomas Murphy, 85 and a friend Buffett decades; Donald Keough, 84, former President of key Buffett taking Coca Cola Co; and former Microsoft Executive Charlotte Guyman, 54.
Their report is likely to take some pressure off Buffett this weekend where tens of thousands of shareholders descend on annual Omaha for Berkshire festival-cum-general-meeting.
"One way or another, Mr. Buffett will have this problem." "It is conceivable that this version relieves Mr. Buffett the chore to address what is a nasty problem," said Jerry Bruni, CEO and portfolio manager at J.V. Bruni and Co, which holds Berkshire sharing and 450 million dollars of assets under management.
Shares of actively traded class b Berkshire were flat at $82.99 after normal business hours.
(Other reports by Jonathan Stempel, Moira Herbst, Matthew Goldstein, Dan Wilchins and Alina Selyukh in New York and Sarah n. Lynch Washington.) (Editing by Robert MacMillan)
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