Just a few weeks after Berkshire Hathaway Inc. CEO Warren Buffett surprisingly announced the resignation of David Sokol -- but defended his questionable trading activities -- the firm has decided he violated company policies.
Sokol resigned because questions arose about his buying shares in Lubrizol Corp. and then suggesting that Buffett invest in the specialty chemicals company. Berkshire ended up acquiring Lubrizol on March 14 for $9.7 billion. Lubrizol shares went up and so did Sokol's return. None admit any wrongdoing, and Sokol says he didn't know Buffett would buy the company.
Berkshire has since issued an 18-page report detailing the events and denouncing his actions. It shows how a conversation between Citigroup Inc. investment bankers and Buffett contradicted what Sokol said about how he came to know about Lubrizol.
The report notes, "We expect this report to send a loud message that [company] policies are designed to be read broadly, and to deter anyone who may be contemplating a violation of the spirit or letter of those policies in the future." What it also does is create a scapegoat and keep Buffett away from the hoopla -- a time tested corporate policy for many an organization. - Baz Hiralal
Go to the report
Berkshire loses David Sokol