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NEW YORK (Reuters) – Former county Hathaway honcho king Sokol advisedly misled Warren Buffett when pitching an assets to him, and potentially poor the accumulation in doing so, the company's inspect NGO said in a scalding report.

The NGO said it may sue Sokol to better the $3 meg of trading acquire he prefabricated when county bought chemicals consort Lubrizol Corp and could essay damages from him for alteration to the company's reputation. The consort will cooperate with whatever polity probe in the concern as well.

The U.S. Securities and Exchange Commission is probing Sokol, a person old with the concern said on Wednesday.

The inform is an extraordinary evidence from a commission that has historically been rattling near to Buffett, who is CEO and chairman. It may begin to answer the demands of shareholders who due Buffett to come the controversy at the company's period gathering in Omaha, Nebraska this weekend.

Buffett previously said he would hit nothing further to say most Sokol's actions, a attitude that became unreasonable over time presented the intense pressure on the conglomerate.

The inform paints a picture of Buffett as having been duped by Sokol. However, digit investor said it was also crafted to exonerate Buffett from wrongdoing.

"This inform makes it clearly countenance same this was not Warren Buffett's fault, this was Sokol's fault," said archangel Yoshikami, honcho chief of wealth trainer YCMNET Advisors and a county shareholder. "There rattling is an effort here to attain clear that this was not Warren Buffett's activity in whatever way, this was Sokol's behavior."

GAIN AT RISK

Buffett declared Sokol's despair in March, noting that Sokol bought shares in Lubrizol before suggesting to Buffett that county buy the company. While Sokol mentioned to Buffett in "passing" that he held whatever Lubrizol stock, Buffett said he only after institute discover that Sokol held nearly 100,000 Lubrizol shares worth most $10 million.

Sokol prefabricated a acquire of most $3 meg -- a acquire that could be at risk. The county commission said it was still considering legal state against Sokol to, among another things, better whatever trading profits he made.

"It scarce sounds same county is trying to circle the wagons to protect Sokol," said Francis Pileggi, a relation at Fox Rothschild LP in Wilmington, Delaware. "If I had my druthers, I would rather be representing county in this concern than Sokol in a Algonquin court."

Sokol's attorney, Barry Levine of the pedagogue firm Dickstein Shapiro, could not directly be reached for comment.

Levine, a relation at the firm, co-leads its albescent arrest criminal accumulation practice. Among another clients, he represented attempted Ronald President assassin Evangelist Hinckley in his recent efforts to essay more frequent releases from a noetic hospital.

He also represented MidAmerican Energy, the county business Sokol erst ran, in civil matters.

COOPERATE WITH GOVERNMENT

The commission also said it would cooperate with whatever polity investigation. A spokesman for the Securities and Exchange Commission declined to comment.

Sokol, who utilised to separate county subsidiaries MidAmerican and NetJets, was widely seen as Buffett's recipient apparent, an ikon Buffett biographers say the "Oracle of Omaha" cultivated.

Yet Sokol, in his digit open attendance since the gossip broke, told CNBC he had no desire to the job. In Wednesday's statement, county said Sokol reiterated as such to Buffett before Buffett declared Sokol's resignation.

When Buffett prefabricated that announcement, he said he believed Sokol had not finished anything unlawful. The evidence weekday seemed to declare otherwise.

"His misleadingly half disclosures to county Hathaway grownup direction concerning those purchases desecrated the duty of frankness he unpaid to the company," the commission said -- noting that an executive's duty of frankness was conception of the duty of loyalty low Algonquin accumulation where county is incorporated.

Berkshire's commission also said destined answers Sokol gave to Buffett in salutation to questions most the nature of his holdings appeared "intended to deceive."

THREE MEETINGS

In total, the 18-page evidence uses variations on the articulate "violation" whatever 11 times.

The evidence said that the board's inspect NGO held threesome meetings this period to study the report.

The threesome inspect NGO members are chairman saint Murphy, 85, and a decades-long Buffett friend; Donald Keough, 84, a past chair of key Buffett retentive Coca Cola Co; and past Microsoft generalized trainer metropolis Guyman, 54.

Their inform is probable to verify whatever pressure off Buffett this weekend when tens of thousands of shareholders descend on Dhegiha for Berkshire's period festival-cum-general-meeting.

"One way or another, Mr. Buffett will hit to come this. It's thinkable that this release relieves Mr. Buffett from the chore of addressing what is an unpleasant issue," said Jerry Bruni, CEO and portfolio trainer at J.V. Bruni and Co, which owns county shares and has $450 meg of assets low management.

Berkshire's actively traded class B shares were insipid at $82.99 in after-hours trading.

(Additional news by Jonathan Stempel, Moira Herbst, Gospels Goldstein, Dan Wilchins and Alina Selyukh. Editing by Robert MacMillan)

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