UPDATE 1-SEC drops case against ex-Berkshire exec Sokol - lawyer
* Buffet said Sokol violated Berkshire Hathaway's insider trading rules
* Sokol once seen as contender for top job at Berkshire Hathaway
* SEC completed probe into Sokol's investment in Lubrizol - lawyer
Jan 3 (Reuters) - The U.S. securities regulator has decided not to take action against David Sokol, once considered a possible candidate for the top job at Warren Buffett's Berkshire Hathaway Inc, Sokol's lawyer told Reuters.
In 2011, Buffett said Sokol violated the company's insider trading rules to score a $3 million windfall profit on shares of U.S. chemicals maker Lubrizol, which rose by nearly a third after Berkshire Hathaway announced it would buy the company.
The U.S. Securities and Exchange Commission (SEC) began investigating Sokol's investment in Lubrizol shortly after Sokol resigned from Berkshire Hathaway.
Sokol's lawyer Barry Wm. Levine told Reuters late on Thursday that he was informed that the SEC had wrapped up its probe and decided not to take action against Sokol.
"SEC has terminated its investigation and has concluded not to bring any proceedings against Sokol," said Levine, a lawyer at legal firm Dickstein Shapiro.
Sokol has been "completely cleared" as there was no evidence against his client, Levine said.
Berkshire Hathaway and SEC could not immediately be reached for comment by Reuters outside of regular U.S. business hours.
Buffett surprised many when he said Sokol had violated insider trading rules by failing to disclose his purchase of Lubrizol shares, less than four weeks after starting talks with Citigroup Inc bankers on acquiring all the shares in the chemicals company that Berkshire Hathaway did not already own.
Sokol, who once chaired Berkshire Hathaway's MidAmerican Energy unit, ran its NetJets plane leasing unit, and was a top Warren Buffett deal maker. He was considered a leading contender to succeed Buffett as Berkshire Hathaway's chief executive.
Buffett told investors last year that Berkshire Hathaway's board has identified his successor, easing some shareholder concern about the future of the company once the famed investor steps down as chief executive.
Buffett, however, did not disclose who the next CEO will be in his annual letter to Berkshire Hathaway shareholders last year.