Berkshire Hathaway Inc. said it fired a London-based insurance executive in connection with ongoing state and federal probes into the holding company's insurance operations.
In a quarterly filing Friday with the Securities and Exchange Commission, Berkshire also said authorities have been investigating certain deals involving Berkshire's General Re Corp. unit that were "accounted for incorrectly" by parties on the other side.
The Berkshire filing shows that state and federal investigators are stepping up their wide-ranging probes of the U.S. insurance industry and particularly its use of "finite reinsurance," an earnings-smoothing product intended to make the books of public companies look better.
Omaha-based Berkshire is headed by Warren E. Buffett, a major investor in The Washington Post Co., where he also serves on the board of directors.
Berkshire said it fired Milan Vukelic, chief executive of Faraday Group, a British unit of General Re, who had previously served as head of General Re's international finite business unit. Vukelic had been under investigation by British regulators for his role in reinsurance contracts dating to 1998. Vukelic had been on administrative leave since May.
In the quarterly filing, Berkshire also said authorities continue to investigate its role in reinsurance deals totaling $500 million in 2000 and 2001 involving General Re and the insurance company American International Group Inc.
In particular, Berkshire said it believes authorities are exploring whether General Re or its units "conspired with others to misstate counterparty financial statements or aided and abetted such misstatements by counterparties." New York-based AIG has already acknowledged that it improperly accounted for the deals.
General Re's role in those transactions have been under investigation since late last year. Two former General Re executives pleaded guilty in federal court, Richmond, Va., in June to a criminal charge of helping arrange the AIG deal. Both have agreed to cooperate with authorities in their probe.
Buffett was questioned about the deals in an interview with state and federal regulators in April, people familiar with the matter said.
In his interview with state and federal authorities, Maurice R. "Hank" Greenberg, AIG's longtime chairman and chief executive, invoked his Fifth Amendment rights against self-incrimination, according to people familiar with the matter. Greenberg was ousted by AIG's board in the spring.