Warren Buffett Says Gen Re Settlement Is Fitting

Buffett says he's OK with General Re paying $92.2M to settle charges because company did wrong

The Associated Press
January 21, 2010

OMAHA, Neb. January 21, 2010 (AP) -- Warren Buffett said Thursday he has no problem with the $92.2 million settlement one of his company's insurance subsidiaries agreed to pay over its alleged role in accounting misconduct schemes by American International Group Inc. and Prudential Financial Inc.

The settlement Berkshire Hathaway Inc. reinsurer General Re agreed to pay was announced on Wednesday by federal officials.

Buffett said the settlements Gen Re agreed to are proper.

"We did something wrong and we paid the price," Buffett said during an interview on the Fox Business Network. "It shouldn't have been done, and there's nothing inappropriate about the fine we paid, so I have no problem with it."

Gen Re, based in Stamford, Conn., is paying $31.7 million to settle government investigations into transactions Gen Re did with AIG and Prudential. The transactions in question helped both AIG and Prudential make their balance sheets appear healthier than they really were.

Gen Re will also pay $60.5 million to resolve a class-action lawsuit by AIG shareholders.

Gen Re previously forfeited to the government about $5 million in fees it earned for its role in the AIG accounting scheme, and the company's top leadership has changed.

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