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Report: SEC complaint on General Re possible

The Securities and Exchange Commission could file civil penalties against Rick Napier, an executive at General Re, a Berkshire Hathaway insurance company, according to a published report Sunday.
/ Source: The Associated Press

The Securities and Exchange Commission is considering civil penalties against Rick Napier, an executive at one of Berkshire Hathaway Inc.’s insurance companies, according to a report on the Wall Street Journal’s Web site, posted Sunday.

On Friday, billionaire investor Warren Buffett’s Berkshire Hathaway announced that civil penalties were being considered by the SEC against a senior vice president at subsidiary General Reinsurance Corp. over alleged violations of securities laws, but did not name the executive who received the so-called Wells notice on May 2.

General Reinsurance has been under a federal probe over some of its reinsurance transactions with Virginia-based Reciprocal of America, a former liability insurer of doctors, hospitals and lawyers, and New York-based insurance company American International Group. In one transaction, AIG admitted that its accounting for a General Re deal was improper.

According to the Wall Street Journal’s online report, Napier, who is based in the company’s Stamford, Conn., office, was one of several General Re executives who was aware that the reinsurance transaction with AIG didn’t carry enough risk to qualify for favorable accounting status.

Berkshire has maintained that officials at General Reinsurance and Berkshire have cooperated fully with investigators from the SEC, the Department of Justice and the attorneys general of New York and Virginia.