MidAmerican Energy's chairman and heir apparent to Warren Buffett resigned Thursday amid questions about his stock purchases in a company later acquired by Berkshire Hathaway.
In an interview on CNBC, MidAmerican Energy Holding Company Chairman David Sokol said he was leaving the company to start his own "mini-Berkshire." The Berkshire news release quotes Buffett on the timing of Sokol's purchase of stock in a company, Lubrizol, which was later acquired by Berkshire. CLICK HERE for the Berkshire news release.
According to the New York Times, Sokol purchased $10 million of Lubrizol shares in January and the value of the stock increased $3 million after the Berkshire announcement of the acquisition in March. The Times also reported today (4/1) the Securities and Exchange Commission (SEC) is "weighing whether to formally investigate" Sokol's stock purchases.
Click on the links below for New York Times articles on the Sokol stock transactions.
Warren Buffett's handling of deputy baffles some experts
SEC said to weigh inquiry
Both Sokol and Buffett have said there was nothing illegal with Sokol's purchase of stock in the company at the same time Berkshire was working to acquire the firm.
Sokol was reported to be in line for heading Berkshire when Buffett, now 80, retires.
Greg Abel, currently president and CEO of MidAmerican Energy Holding Company in Des Moines, has been tabbed by Buffett to take over Sokol's role at the utility. Abel is a long-time associate of Sokol going back to when CalEnergy purchased MidAmerican 10 years ago.
Both Sokol and Abel received hefty stock options after Berkshire acquired MidAmerican. In 2009, Berkshire's annual report disclosed Sokol cashed in options worth $96 million and Abel cashed in options worth $27 million.
