Lawsuit Against Berkshire Hathaway, Inc. Over Sokol Affair Dismissed-Reuters
Reuters reported that Berkshire Hathaway, Inc. won dismissal on Match 19, 2012, of a shareholder lawsuit that stemmed from allegations former executive David Sokol profited by violating the Company's insider trading policy. Shareholders sued the conglomerate's board for refusing to take legal action against Sokol, a former heir apparent at Berkshire. Sokol resigned last year after disclosing he bought 96,000 shares of Lubrizol Corp and then urged Berkshire Chief Executive Warren Buffett to acquire the chemical company. Although Delaware Chancery Court judge Travis Laster dismissed the case, he described the claims against Sokol as 'really strong' and said it might raise questions if the board did not pursue Sokol. However, Laster said the shareholders failed to make their argument the board was so beholden to their prestigious positions that they could not be trusted to pursue Sokol, a once-close associate of Buffett. The shareholders wanted the right to pursue that litigation on behalf of the company in what is known as a derivative lawsuit. Laster accepted Berkshire Hathaway arguments that the company could reasonably want to wait for the outcome of an investigation by the Securities and Exchange Commission and may still sue Sokol. The lawsuit was dismissed without prejudice, meaning shareholders could still file an amended lawsuit. An attorney for the shareholders declined to comment on plans to do so.
Latest Developments for Berkshire Hathaway Inc
- Share this
- Digg this