Former Execs at Berkshire Hathaway's Gen Re Convicted in Fraud Trial

Adam Nadel

Warren Buffett, right, chairman of Berkshire Hathawy Inc., speaks to the media while Ron Ferguson, chairman and chief executive officer of General Re, listens in New York on Friday, June 19, 1998. Berkshire Hathaway Inc. is buying General Re for $22 billion worth of stock, adding one of the world's leading insurers of insurance companies to its portfolio. Berkshire announced Friday after the stock market closed that it would let General Re operate independently of its other insurance operations,

Four former executives of Berkshire Hathaway's General Re have just been found guilty in a closely watched criminal fraud trial. A former executive of American International Group was also convicted by the jury, following a one-month federal court trial in Hartford, Connecticut.

All five were accused of creating and hiding an illegal deal to make AIG's reserves look better than they actually were in 2000 and 2001.

The defense in the trial had floated the idea of calling Berkshire Chairman Warren Buffett to the stand, in an effort to show that he knew what the defendants were doing, didn't try to stop them and didn't think there was anything wrong with it. The defense has portrayed the deal in question as a perfectly legal transaction.

Despite the talk, the defense never did call Buffett to the stand, vindicating Warren Buffett Watch's semi-bold prediction made as the trial was getting underway.

Berkshire Hathaway's current price:

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