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Buffett Co. Gets Request from Prosecutors

Buffett Co. Gets Request from Prosecutors
Wed Mar 2, 2005 08:55 AM ET

NEW YORK (Reuters) - Warren Buffett's Berkshire Hathaway Inc. (BRKa.N: Quote, Profile, Research) (BRKb.N: Quote, Profile, Research) said federal prosecutors have requested information several times this year in connection with their investigation of a collapsed insurer that did business with Berkshire's General Re Corp. unit.

In a filing late Tuesday with the U.S. Securities and Exchange Commission, Berkshire said that it and General Re are cooperating with the probe by the U.S. Attorney in Richmond, Virginia, of Reciprocal of America, which was placed into receivership in January 2003.

The Wall Street Journal on Wednesday said federal prosecutors are examining whether General Re helped Reciprocal hide details of its deteriorating financial situation, and for more than one decade helped executives disguise loans as reinsurance. It cited unnamed people familiar with the probe.

Investigators want to know if General Re aided an alleged program to deceive state regulators and policyholders of the insurer with transactions dating to the early 1990s, the newspaper said, citing the sources.

Calls to Berkshire were not immediately returned. Berkshire is based in Omaha, Nebraska. General Re is based in Stamford, Connecticut.

Berkshire said the U.S. Attorney and Department of Justice in December "and on several occasions since then" sought information about Reciprocal and a related off-shore reinsurer, First Virginia Reinsurance Ltd. The requests also sought information about General Re's dealings with "other insurers."

Berkshire said General Re and four current and former employees, including a former president, in October 2003 received subpoenas related to the probe. General Re provided reinsurance coverage to Reciprocal from the late 1970s to 2002, Berkshire said.

General Re is involved in other regulatory probes as well, Berkshire has said. New York Attorney General Eliot Spitzer in January subpoenaed General Re for documents related to insurance products that might help companies smooth earnings. The SEC in December requested documents on the same matter.

Berkshire is expected to report fourth-quarter results and release its annual report on Saturday.

Berkshire Class A shares closed Tuesday at $90,800. Its Class B shares closed at $3,021.10. (Additional reporting by Nicole Maestri)


LINK: http://www.reuters.com/newsArticle.jhtml?type=businessNews&storyID=7784591