SEC Said to Probe ex-Berkshire Manager Sokol Over Lubrizol Stock Purchases
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David Sokol, the Berkshire Hathaway Inc. (BRK/A) manager who resigned after disclosing that he bought stock in a firm whose takeover he helped negotiate, is being investigated by U.S. regulators, a person with knowledge of the matter said.
The Securities and Exchange Commission is probing whether Sokol, 54, bought shares in Lubrizol Corp. (LZ) on inside information that Berkshire was considering buying the company, said the person, who declined to be identified because the investigation is secret. The SEC is seeking records from Sokol’s brokerage and examining trading data from the Financial Industry Regulatory Authority, the person said.
“I don’t believe that I did anything wrong,” Sokol told CNBC today in a televised interview. “I can understand the appearance issue, and that’s why we made it public.”
Sokol bought about 96,000 Lubrizol shares in January, less than two weeks before recommending the company as a takeover candidate, Berkshire Chairman and Chief Executive Officer Warren Buffett said yesterday in a statement. Sokol had started talks with Lubrizol in December, according to a regulatory filing last week. The SEC will likely examine communications involving Sokol, Buffett and Lubrizol officials, the person said.
Berkshire agreed to buy Wickliffe, Ohio-based Lubrizol, a maker of engine additives, for $9 billion on March 14. The stock purchases may have given Sokol a profit of about $3 million, according to Buffett’s disclosure and data compiled by Bloomberg.
Buffett didn’t immediately respond to an e-mail request for comment sent to his assistant, Carrie Kizer.
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