8-KOther Events

BERKSHIRE HATHAWAY INC 8-K Report, Corporate Update (Feb 6, 2006)

Filed February 6, 2006For Securities:BRK-BBRK-A

Summary

Berkshire Hathaway Inc. (BRK-B) filed an 8-K on February 6, 2006, to disclose significant legal developments concerning former executives of its subsidiary, General Re Corporation (Gen Re). The U.S. Department of Justice announced a federal grand jury indictment against three former Gen Re executives, including the former CEO, CFO, and an Assistant General Counsel, in connection with a transaction with American International Group (AIG) in late 2000. Concurrently, the SEC filed an enforcement action against these individuals and others for their alleged roles in aiding and abetting AIG's violations of federal securities laws related to this transaction. These actions follow previous legal proceedings, including guilty pleas from two other former Gen Re executives in June 2005 related to conspiring to misstate AIG's financial statements. While Berkshire Hathaway is not directly implicated as a defendant in these indictments or SEC actions, the report serves to inform investors of the ongoing legal scrutiny surrounding a transaction involving a former subsidiary's executives. Investors should monitor these developments for any potential implications on Gen Re's operations or Berkshire's overall financial reputation and legal standing.

Key Highlights

  • 1Federal grand jury indicted three former executives of General Re Corporation (Gen Re) on charges including conspiracy to commit securities fraud, securities fraud, and wire/mail fraud.
  • 2The charges are related to a transaction involving American International Group (AIG) effected in late 2000.
  • 3The SEC filed an enforcement action against the same former Gen Re executives (and others) for aiding and abetting AIG's violations of federal securities laws.
  • 4This development follows guilty pleas from two other former Gen Re executives in June 2005 concerning the same AIG transaction.
  • 5The SEC complaint seeks permanent injunctive relief, disgorgement, civil penalties, and officer/director bars against the defendants.
  • 6Berkshire Hathaway Inc. itself is not named as a defendant in these criminal indictments or SEC enforcement actions.
  • 7The report was filed by Berkshire Hathaway to disclose these "Other Events" as required.

Frequently Asked Questions

No, Berkshire Hathaway Inc. is not directly named as a defendant in the federal grand jury indictment or the SEC's enforcement action. The charges and actions are against former executives of its subsidiary, General Re Corporation (Gen Re), and former AIG personnel.

The charges relate to a transaction initially effected between General Re Corporation (Gen Re) and American International Group (AIG) in late 2000. The indictments and SEC actions allege that former executives conspired to misstate financial statements in connection with this transaction.

The indicted individuals face charges including conspiracy to commit securities fraud, securities fraud, and wire/mail fraud. The SEC's complaint seeks remedies such as permanent injunctions, disgorgement of ill-gotten gains, civil penalties, and bars from serving as officers or directors of public companies.

Yes, in June 2005, two other former executives of Gen Re pleaded guilty to federal criminal charges of conspiring to misstate AIG financial statements and entered into partial settlements with the SEC.