David Sokol, the executive who left Warren Buffett’s Berkshire Hathaway Inc. amid allegations he broke insider-trading rules, won’t face enforcement actions from the Securities and Exchange Commission, his lawyer said.
The U.S. agency ended its investigation of Sokol, attorney Barry Levine said yesterday in a phone interview after hearing from the SEC’s division of enforcement.
Sokol, who stepped down as chairman of Berkshire’s MidAmerican Energy Holdings Co. in April 2011, bought shares of Lubrizol Corp. in January of that year, less than three months before Berkshire announced a $9 billion acquisition of the company. Buffett was misled by Sokol about his dealings before the takeover, a Berkshire audit committee concluded. Levine has said Sokol never broke the law or violated Berkshire policies.
“They have intensely reviewed the facts, they’ve done it with uncommon care, and they have of course comprehensively reviewed the law,” said Levine, a partner at Dickstein Shapiro LLP in Washington. “Neither the law nor the facts suggest any impropriety.”
The SEC’s decision was reported earlier by the Wall Street Journal.
John Nester, an SEC spokesman, declined to comment. Buffett didn’t immediately respond to a request for comment e-mailed to an assistant outside normal business hours.
Buffett, Berkshire’s chairman and chief executive officer, said in 2011 that Sokol had violated the company’s insider-trading rules. The billionaire said that he made a “big mistake” in his oversight of Sokol.
Buffett, now 82, sought to reassure investors in the wake of Sokol’s resignation that Berkshire had strong candidates in line to replace him at the head of the company. Sokol was considered by Buffett biographer Andrew Kilpatrick as the top candidate to be next CEO.
“The leading candidate right now, I would lay a lot of money on him being straight as an arrow,” Buffett said at a press conference at the 2011 annual meeting of shareholders in Omaha, Nebraska, where Berkshire is based.