Guy Spier quoted in the Financial Express
Guy Spier
May 09, 2005

I was written up in the Financial Express.

“The very worst that could happen is that one or two individuals are found to have done something wrong,” said Guy Spier, who manages $50 million at New York-based Aquamarine LLC, including about $10 million of Berkshire shares. “There is absolutely no question in my mind that Buffett acted properly.”

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Buffett’s Berkshire says SEC may sue executive at General Re’s US unit
MAY 8: Warren Buffett’s Berkshire Hathaway Inc said an unidentified executive at its General Re unit may be sued by the Securities and Exchange Commission as the regulator investigates reinsurance accounting.
The SEC sent a notice on May 2 to a senior vice president at General Re’s US unit saying the regulator was considering a civil suit and penalties, Berkshire said yesterday in its first-quarter earnings release. Profit at the insurance and investment company fell 12% as Buffett’s $21.8 billion bet against the dollar spurred $307 million in pretax losses.
Berkshire, run by Buffett for four decades, has become embroiled in accounting probes as the SEC, New York Attorney General Eliot Spitzer and regulators as far away as Australia examine at least three of its reinsurance clients. The SEC’s notice is the first indication the agency may take action against an employee of Berkshire itself.
“The very worst that could happen is that one or two individuals are found to have done something wrong,” said Guy Spier, who manages $50 million at New York-based Aquamarine LLC, including about $10 million of Berkshire shares. “There is absolutely no question in my mind that Buffett acted properly.”
General Re Chief Executive Officer Joseph Brandon declined to identify the individual or comment on the SEC’s so-called Wells notice. SEC spokesman John Heine declined to comment.
Buffett, the world’s second-richest man in a ranking by Forbes magazine, has accumulated dozens of subsidiaries and thousands of followers with folksy investment advice and a knack for identifying undervalued assets. Berkshire shares have risen an average 22% a year since 1987 and are down 4.4% this year amid the reinsurance probes.
Net income at the Omaha, Nebraska-based company fell to $1.36 billion, or $886 a share, from $1.55 billion, or $1,008, a year earlier, the company said yesterday.
Profit excluding the currency bet and other changes in the value of investments climbed 27% to $936 a share, exceeding a $906 estimate by Fox-Pitt Kelton Inc analyst Gary Ransom and a $914 projection by Credit Suisse First Boston’s Charles Gates.
Investigators are looking at non-traditional reinsurance that may have been improperly used to mask losses or smooth profit. Regulators in Australia are probing transactions between a General Re unit and a failed insurer.
—Bloomberg

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