Warren Buffett to 'Welcome All Questions' on 'Violations' of Ethical Standards by David Sokol
Warren Buffett tells CNBC he wants to make his first public comments to shareholders this weekend about tonight's blistering report by Berkshire Hathaway's Audit Committee on David Sokol's Lubrizol trades.
Buffett promises to "welcome all questions" on the Sokol scandal this coming Saturday, when tens of thousands of Berkshire shareholders will be in Omaha for the company's annual meeting.
There's no statement from Buffett in the news release accompanying tonight's release of an 18-page reportfinding that Sokol violated the company's ethical standardswhen he bought Lubrizol shares while "serving as a representative of Berkshire Hathaway in connection with a possible business combination with Lubrizol."
Buffett hasn't said anything about the matter since his unusual public letter less than a month ago first revealing Sokol's Lubrizol purchases. At that time, Buffett wrote he would not have anything to say on the matter in the future.
Tonight's report appears to be a response to widespread criticism about Buffett's handling of Sokol's trades and resignation.
Berkshire's Audit Committee also accuses Sokol of making "misleadingly incomplete disclosures" to Berkshire's senior management about his Lubrizol stock buys, even as he was recommending that Berkshire buy the company.
The panel says Berkshire is considering "possible legal action against Mr. Sokol to recover any damage the Company has sustained, or his trading profits."
Sokol made a profit of around $3 million on his shares when Berkshire announced on March 14 that it would buy the chemicals company at a 28 percent premium to where Lubrizol was trading.
Sokol appeared live on CNBC (complete transcript) on March 31, the morning after his surprise resignation as a top Berkshire executive was announced. At that time he strongly defended his actions, insisting he did nothing wrong.
When asked if he would have done anything differently, he told Becky he would "never have mentioned it to Warren, and just made my own investment and left it alone."
So far tonight, we have not been able to reach him for his response to the Audit Committee's accusations.
Before the scandal, Sokol had been considered the leading candidateto eventually succeed Buffett as Berkshire's CEO.
Here's the report:
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