Berkshire Hathaway (NYSE:BRKA) on Wednesday said an internal audit had determined that former top executive David Sokol had violated the company’s policies regarding insider trading.
“Berkshire Hathaway’s top priority is to maintain the highest standards of business ethics. Company policies require the employees of Berkshire Hathaway and its subsidiaries to uphold those standards,” the company said in a statement released after stock markets closed.
“The Audit Committee has considered the conduct of David Sokol in connection with his trading in the shares of Lubrizol, and has determined that it violated those standards.”
Sokol’s “misleadingly incomplete disclosures” to Berkshire Hathaway executives concerning those purchases “violated the duty of candor he owed” the company, the statement added.
Sokol, long viewed as a possible replacement for legendary Berkshire CEO Warren Buffett, resigned in March around the same time the Lubrizol controversy came to light. Questions were raised after it was disclosed that Sokol had bought about $10 million in Lubrizol shares as he was putting together a deal for Berkshire to purchase the maker of chemical products.
Sokol has denied any wrongdoing and Buffett is on record as saying he didn’t believe Sokol broke any laws.