Tuesday, April 19, 2011

Buffett, Berkshire (BRK-A) Sued Over Sokol, Lubrizol (LZ) Situation

In what appears to be the first lawsuit filed against Berkshire Hathaway Inc. (NYSE:BRK-A) and Warren Buffett over the recommendation by former Berkshire manager David Sokol for Buffett to invest in Lubrizol Corp. (NYSE:LZ) after Sokol had acquired shares in the company, Berkshire investor Mason Kirby is asking for the recovery of damages.

Kirby stated in papers made public in Delaware Chancery Court in Wilmington, “Sokol knew that Buffett would closely consider and likely take his recommendation. As a result of Sokol’s unethical behavior, Berkshire suffered significant reputational losses and other damages.”

Kirby asserts that Buffett and Sokol, “working in concert,” violated duties to shareholders “and put the company at risk for a potential adverse SEC action and negative credit rating.”

Sokol acquired over 96,000 shares of Lubrizol in early January before making a recommendation to Buffett for Berkshire to acquire shares in the company.

Berkshire was trading at $120,903.00, gaining $378.00, or 0.31 percent, as of 2:55 PM EDT.

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