August 21, 2014 in Business

FTC slaps Buffett’s company with penalty

Josh Funk Associated Press
 
Diversified investments

Berkshire Hathaway Inc. employs more than 330,000 people across all its companies, which include Geico insurance and BNSF railroad.

OMAHA, Neb. – Warren Buffett’s company has agreed to an $896,000 penalty for failing to tell regulators about a December 2013 investment in wallboard maker USG Corp. beforehand.

The Federal Trade Commission said Wednesday that Berkshire Hathaway Inc. should have notified the Justice Department before it converted $325 million of senior USG notes it held into 21.4 million shares of the company.

Because Berkshire was already a significant USG shareholder, antitrust laws required it to notify regulators because of the size of the deal. At the end of June, Berkshire held just over 39 million USG shares.

Berkshire did correct its initial filing after the USG investment and clarify that it should have notified officials. But regulators said Berkshire made a similar mistake six months earlier when it acquired securities in Symetra Financial Corp.

“Although we may not seek penalties for every inadvertent error, we will enforce the rules when the same party makes additional mistakes after promises of improved oversight,” said Deborah Feinstein, director of the FTC’s Bureau of Competition. “Companies and individual investors alike should ensure that they have an effective program in place to monitor compliance.”

© Copyright 2014 Associated Press. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.


Thoughts and opinions on this story? Click here to comment >>

Get stories like this in a free daily email