SAN FRANCISCO — David Sokol knew of progress toward a possible Berkshire Hathaway bid for Lubrizol before he bought almost $10 million worth of stock in the lubricant company, according to a new regulatory filing.
Sokol, once considered a leading candidate to replace Warren Buffett at the helm of Berkshire, resigned in late March after it came to light that he bought Lubrizol shares before urging Buffett to buy the company.
Buffett said there was nothing illegal about the trades, and Sokol told Fox Business Network that there was “absolutely no inside information” involved.
But Lubrizol updated its proxy statement for the deal late Monday and included new information about what it said Sokol was told in December about progress toward a possible deal for the company.
Sokol was told that Lubrizol’s chief executive planned to inform the board about Berkshire’s “possible interest” in bidding for the lubricant company, according to the Monday filing.
“This new information is extremely problematic,” said attorney Andrew Stoltmann, who represents investors who are victims of investment fraud. “Knowledge of what a chief executive officer plans to tell his board regarding a possible acquisition would likely be considered material, nonpublic information. Trading on this information is a significant problem under the federal securities laws.”
