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The report is much more strident in tenor than the minimally admonishing tone struck by Berkshire CEO Warren Buffett in the March letter announcing Sokol’s resignation. Buffett’s letter acknowledged that Sokol purchased nearly 100,000 Lubrizol shares worth approximately $10 million in the months prior to the $9 billion acquisition but maintained that the stock purchases were not “in any way unlawful.”
To the contrary, the audit committee report finds that “Mr. Sokol’s actions did not satisfy the duty of full disclosure inherent in the Berkshire Hathaway policies and mandated by state law. His remark to Mr. Buffett in January, revealing only that he owned some Lubrizol stock, did not tell Mr. Buffett what he needed to know.”
The report was made public, the company said, to reinforce the importance of employees adhering to its Code of Business Conduct and Ethics. “We expect this report to send a loud message that those policies are designed to be read broadly, and to deter anyone who may be contemplating a violation of the spirit or letter of those policies in the future,” the report states.
The report also mentions the possibility of legal action against Sokol to recover his trading profits or any damage the company has sustained. Last week, a shareholder