SEC gives ‘Wells notice’ to General Reinsurance CEO

Berkshire Hathaway Inc. (NYSE:BRK.A and BRK.B) has announced that on Sept. 8, 2005, Joseph Brandon, CEO of General Reinsurance Corporation, a wholly owned subsidiary of Berkshire Hathaway, received a "Wells notice" from the staff of the Securities Exchange Commission, which indicates SEC staff is considering a civil action.
The SEC is engaged in an ongoing investigation of non-traditional insurance products.
According to Berkshire, the Wells notice states SEC staff is considering recommending that the Commission bring a civil injunction action, alleging that Mr. Brandon violated or aided and abetted violations of the Securities Exchange Act of 1934.
The notice further states that in connection with such action it may seek permanent injunctive relief, an order barring Mr. Brandon from serving as an officer or a director of a public company, disgorgement, and civil penalties against Mr. Brandon.
Under the Commission’s procedures, the recipient of a Wells notice has the opportunity to respond to the staff before any formal recommendation is made to the Commission to seek civil action.