Berkshire committee finds David Sokol have violated trade policies

Berkshire committee finds David Sokol to have violated trade policies

3:51 PM, 28th April 2011
Berkshire committee finds David Sokol to have violated trade policies

OMAHA, US: Berkshire Hathaway’s 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 its ethics standards. A report released by the audit committee said in particular – Sokol’s purchases of Lubrizol shares while serving as a representative of Berkshire Hathaway in connection with a possible business combination with Lubrizol violated company policies and its insider trading policies and procedures.

Former executive David Sokol asked investment bankers at Citi for details on three possible acquisition candidates in the chemical sector, including Lubrizol. Berkshire announced a deal to acquire Lubrizol for $ 9.7 billion on March 14. Sokol resigned from Berkshire on March 30 after it was disclosed that he had acquired nearly 100,000 Lubrizol shares in early January, one week before mentioning the deal to Berkshire CEO Warren Buffett.

The report mentioned Sokol’s had made “misleadingly incomplete disclosures to Berkshire Hathaway senior management.” Sokol was encouraged to scout for potential acquisition opportunities for Berkshire. Last fall, Sokol met with investment bankers at Citi and requested information about companies in the chemicals industry for acquisitions. Citi sent Sokol data on 18 companies in October. “In November, Citi sent Sokol additional information concerning three of those companies, including Lubrizol. Citi’s data on Lubrizol and the other two chemical makers, which were not identified, were provided from publicly available sources, the report said. On December 13, Sokol met with Citi bankers and said the only company he found interesting was Lubrizol. Further, Sokol asked Citi to see if Lubrizol CEO James Hambrick was willing to talk about Lubrizol and Berkshire.

 The report says that the timing of Sokol’s purchases became clear to the company after a discussion between Buffett and Citi on the day the deal was announced. “A Citi representative with whom Berkshire Hathaway did business congratulated Buffett on the merger agreement, and told Buffett that Citi’s investment bankers had brought Lubrizol to Sokol’s attention,” the report says. “This was the first time Buffett heard that investment bankers played any role in introducing Lubrizol to Sokol, and did not square with Sokol’s remark in January that he had come to know Lubrizol by owning the stock.”

Since, Sokol had resigned from the company, he could not be charged with misconduct and the audit committee was considering options.

(C) WOC News

0 Comments

Login

Your Comments (Up to 2000 characters)
Please respect our community and the integrity of its participants. WOC reserves the right to moderate and approve your comment.

Related News


Perstorp opens new feed additives plant in India

PERSTORP, SWEDEN: Perstorp has opened a feed additive production plant in Vapi, India, as part of its plan to increase its presence in the Asian feed ...

Read more
Praxair, CCPHC to supply gases to chemical complex in Chongqing

DANBURY, US: Praxair (China) Investment Company, in a joint venture with Chongqing Chemical and Pharmaceutical Holding Group Company (CCPHC), will s ...

Read more
BASF to acquire inge watertechnologies, ultrafiltration specialist

  The acquisition will help the company broadens technology base for it’s water platform. It will help them to profitably expand market po ...

Read more
Momentive files for $ 862.5 million IPO

  BANGALORE, INDIA: Apollo Management-owned specialty chemicals maker Momentive Performance Materials Holdings LLC filed with US securities regu ...

Read more
Bayer CropScience, DuPont sign canola trait licensing agreement

  The collaboration will look to provide new offerings to expand canola grower choices. MONHEIM, GERMANY/DES MOINES, US: Bayer CropScience and ...

Read more
Momentive to sell composites and coatings business to PCCR

  COLUMBUS, US: Momentive Specialty Chemicals Inc has agreed to sell its North American composites and coating resins business to PCCR USA, a su ...

Read more
www.worldofchemicals.com uses cookies to ensure that we give you the best experience on our website. By using this site, you agree to our Privacy Policy and our Terms of Use. X