OMAHA, Neb. (TheStreet) - Berkshire Hathaway (BRK.B) shares have slipped approximately $2.50 this week through Thursday, closing below $80 on Wednesday and Thursday -- the first time shares of Warren Buffett's investment company have closed below the $80 mark since the last week of February.
Still, that wasn't the bad news for Berkshire Hathaway this week.
In fact, a lawsuit that was filed in U.S. District Court in South Bend, Indiana earlier this week alleges Berkshire Hathaway ethical violations that are in stark contrast to Berkshire Hathaway's recent dubbing as the business with the best reputation in the U.S.
The law suit was filed by an ex-Berkshire Hathaway employee, Brad Mart, saying that Berkshire Hathaway executives fired him for whistle-blowing on fraud at Berkshire's RV subsidiary, Forest River.In a complaint filed with the U.S. District Court for Northern Indiana, Mart alleges that after bringing to the attention of Berkshire Hathaway executives millions of dollars in fraud, Buffett and Berkshire Hathaway senior staff made no effort to address the situation. Mart alleges that after being promised the post of CEO at Forest River, he was fired for his whistle blowing activity. The alleged fraud that Mart specifies in the court complaint includes the removal of cash from Forest River factory vending machines for deposits made to the personal account of Forest River CEO Peter Liegl. Mart has asked the U.S. District Court for the CEO post he says he was promised, and damages including money he lost when he purchased a new home on the expectation of receiving the CEO post at Forest River. Still, for squeaky clean Warren Buffett, the court complain gets much uglier than the monetary damages. Mart claims that Forest River CEO Liegl threatened his life. Mart is also suing Forest River for breach of contract. Mart also contends in the complaint that Berkshire Hathaway shareholders were defrauded when Forest River used smoke and mirrors accounting tricks to allow CEO Liegl to pay former employees salary or benefits. The former Berkshire Hathaway manager's complaint also alleges that Forest River CEO Liegl required the company - which makes RVs, restroom trailers and pontoon boats - to buy parts at inflated prices from another company which he owned.
Select the service that is right for you!COMPARE ALL SERVICES
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
- Real Money + Doug Kass Plus 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV