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NEW YORK (Reuters) – Former county Hathaway chief king Sokol advisedly misled Warren Buffett when pitching an assets to him, the company's commission concluded in a scathing inform that haw add render to a pending SEC enquiry of Buffett's one-time recipient apparent.

The NGO said it haw process 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 module impact with whatever polity enquiry in the concern as well.

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

Sokol's high-profile professional disputed the board's inform and said his computer is "a man of exceptional righteousness and probity."

"I hit famous Mr. Sokol and hit represented his companies in business proceedings since the mid 1980s," said Barry Levine of the Washington concern Dickstein Shapiro. "He would not, and did not, change improperly, nor did he violate whatever clean datum of the county Hathaway policies."

Levine, who has finished impact for Sokol's past consort MidAmerican Energy, co-heads Dickstein's white collar malefactor accumulation training and has also represented attempted Ronald President assassin John Hinckley.

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

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

The inform paints a represent of Buffett as having been duped by Sokol. However, one 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, chief chief of wealth manager YCMNET Advisors and a county shareholder. "There really is an effort here to attain country 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 acquire the company. While Sokol mentioned to Buffett in "passing" that he held whatever Lubrizol stock, Buffett said he only later institute out 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 ease considering legal action against Sokol to, among another things, better whatever trading profits he made.

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

Besides the possibleness subject recovery, Berkshire's commission also said it would impact with whatever polity investigation. A spokesman for the Securities and Exchange Commission declined to comment.

Legal experts said Sokol appears to be in more trouble now than was prototypal thought.

"I conceive Mr. Sokol has a actual difficulty here," said Duke University Law Professor James Cox. "This is not a near call at all."

FALLEN HEIR

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

Yet Sokol, in his one public attendance since the gossip broke, told CNBC he had no aspiration 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 senior direction concerning those purchases violated the duty of frankness he owed to the company," the commission said -- noting that an executive's duty of frankness was part of the duty of loyalty under Algonquin accumulation where county is incorporated.

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

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

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

Berkshire professional Daffo Olson said Sokol was interviewed at small threesome nowadays regarding his Lubrizol trading and contacts with Citigroup Inc bankers. "In unification with the preparation of the inspect NGO report, a request for a further interview with Mr. Sokol was prefabricated to his attorney. Mr. Sokol was not prefabricated available," Olson said in the statement.

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

Their inform is likely to take whatever push soured Buffett this weekend when tens of thousands of shareholders move on Dhegiha for Berkshire's period festival-cum-general-meeting.

"One artefact or another, Mr. Buffett module hit to come this. It's thinkable that this promulgation relieves Mr. Buffett from the chore of addressing what is an acerbic issue," said Jerry Bruni, CEO and portfolio manager at J.V. Bruni and Co, which owns county shares and has $450 meg of assets under management.

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

(Additional news by Jonathan Stempel, Moira Herbst, Matthew Goldstein, Dan Wilchins, Alina Selyukh and Jonathan Spicer in New York and wife N. Lynch in Washington. Editing by Robert MacMillan)

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