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Berkshire Shares Dip as SEC Weighs Investigation

(Updated from Wednesday, March 30, with comments from David Sokol, analysts, Berkshire Hathaway stock trading impact)

NEW YORK ( TheStreet) -- David Sokol, who resigned Wednesday as one of Warren Buffett's top lieutenants at Berkshire Hathaway (BRK.B), said he wasn't looking to be the next Warren Buffett.

Yet the market reaction was one of surprise, and questions related to Sokol's trading in shares of Lubrizol ahead of Berkshire's purchase of the chemicals company in mid-March, a transaction in which Sokol played a key role, are reverberating through the markets and public court of opinion.

The Securities and Exchange Commission said on Thursday that it would look into the potential insider trading aspects of the Sokol trades in Lubrizol, though the SEC described the matter as not being "urgent," according to a report on CNBC. The Wall Street Journal had reported on Wednesday night that the SEC was looking into the Sokol Lubrizol trades, citing people "familiar with the matter."

Insider trading lawyers have indicated that major corporate transactions are routinely reviewed by regulators for potential insider trading.
David Sokol

Berkshire Hathaway B shares slid by roughly 2% on Thursday on heavy volume.

The resignation release Wednesday discussed at length trades that Sokol made in Lubrizol (LZ), a company that Buffett would ultimately agree to acquire in mid-March, and which Sokol first suggested to Buffett as an acquisition candidate.

In an interview Thursday on CNBC, Sokol said the information about his purchases in Lubrizol were included in the news release for full disclosure to be "100% transparent."

Sokol was among the top candidates rumored as a potential replacement for Buffett as CEO of Berkshire Hathaway.

But in the interview Thursday, Sokol said he didn't aspire to be the CEO of Berkshire, but instead wanted to invest his family's money in a "mini-Berkshire."

Sokol ran what has become one of the cornerstones of Berkshire Hathaway's "capital intensive" business segment, MidAmerican Energy, and was credited by Buffett on countless occasions in recent years for also engineering the turnaround in the floundering business jet-leasing company NetJets. Buffett has also commended Sokol for overhauling Berkshire subsidiary Johns Manville, which he again noted in the resignation release.

There is a significant issue for Berkshire Hathaway shareholders in attempting to assign a stock value to the Buffett CEO succession issue.
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