David Sokol fired back at Warren Buffett, with his lawyer saying the one-time Berkshire Hathaway Inc executive had been made a scapegoat over a transaction that led to his sudden resignation.
Sokol, who chaired Berkshire's MidAmerican Energy unit, ran its NetJets plane leasing unit and was a top Buffett deal maker, was considered a leading contender to succeed the 80-year-old Buffett as Berkshire's chief executive.
But Buffett told shareholders at Berkshire's annual meeting on Saturday that Sokol had violated the company's insider trading and ethics rules by failing to disclose his January purchase of Lubrizol Corp shares after starting talks with bankers about the chemicals company.
"I obviously made a big mistake by not saying, 'Well when did you buy it?"' Buffett told the nearly 40,000 attendees at the meeting in Omaha, Nebraska. Sokol's resignation cast a cloud over an event Buffett calls "Woodstock for Capitalists."
On March 14, Berkshire agreed to buy Lubrizol for about $9 billion. That gave Sokol a roughly $3 million personal profit on his own Lubrizol investment. He resigned from Berkshire on March 28, and the stake became public two days later.
"David Sokol is deeply saddened that Mr. Buffett, whom he considered a friend and mentor, would disparage him as he has done today," said his lawyer Barry Levine, a partner at Dickstein Shapiro LLP, in an e-mailed statement.
Levine said Sokol had honored his fiduciary duties, and never broke the law or any Berkshire policy.
He also said that Buffett had reneged on his defense of Sokol, including his March 30 statement in which he called Sokol's Lubrizol investment lawful.
"It is alarming that Mr. Buffett would be advised to so completely flip-flop and resort to transparent scapegoatism," Levine said.
"After 11 years of dedicated and hugely successful service to various Berkshire Hathaway subsidiaries, Mr. Sokol would have expected to be treated fairly. That would have been in Berkshire's interest."
Berkshire did not immediately reply to e-mailed requests for comment.
The U.S. Securities and Exchange Commission is probing Sokol, a person familiar with the matter has said.
© 2024 Thomson/Reuters. All rights reserved.