(Bloomberg News) David Sokol, who resigned yesterday as a top manager at Berkshire Hathaway Inc., said he did nothing unethical when he bought stock in a company that he later proposed as a takeover target to Chairman Warren Buffett.

"I don't believe that I did anything wrong," Sokol told CNBC today in a televised interview. "I can understand the appearance issue and that's why we made it public."

Sokol, 54, bought about 96,000 Lubrizol Corp. shares in January, less than two weeks before recommending the company as a target, Buffett said yesterday in a statement. Sokol had started confidential talks with Lubrizol the month before, according to a regulatory filing last week. Lawyers at the U.S. Securities and Exchange Commission were reviewing Buffett's statement and discussing the matter, according to one person with knowledge of the talks.

"The SEC is going look at that deal to check for insider buying and selling, so if there's an issue, the time to clean it up is now," said Daniel Genter, president of RNC Genter Capital Management in Los Angeles, which oversees about $3.7 billion.

Berkshire Class A shares fell $1,919, or 1.5%, to $126,184 at 9:32 a.m. in New York Stock Exchange composite trading. Sokol was chairman of Berkshire's MidAmerican Energy Holdings and its roofing unit Johns Manville. He was also CEO of NetJets Inc., Berkshire's luxury-flight subsidiary.

Sokol told CNBC that Buffett decides all acquisitions. Sokol had "no authority whatsoever" over investment decisions, he said in the interview. "I couldn't spend a dollar of Berkshire's money buying a security."

Share Purchases

Sokol bought 96,060 Lubrizol shares on January 5, 6 and 7, Buffett said. Berkshire agreed to buy the firm for $9 billion on March 14. The stock purchases may have given Sokol a profit of about $3 million, according to Buffett's disclosure and data compiled by Bloomberg. Sokol's compensation from MidAmerican totaled $59.5 million in the last five years, according to the unit's SEC filings.

"It's just a classic case of someone not fitting into that Buffett culture," said Lawrence G. McDonald, president of McDonald Advisory Group in New York and author of A Colossal Failure of Common Sense: The Inside Story of the Collapse of Lehman Brothers with Patrick Robinson. "That's the type of thing you might do at another hedge fund, but you don't do it at Berkshire."

Buffett said in the statement that he thought Sokol's stock purchases were legal. Sokol said he didn't trade on inside information, according to a statement from Fox Business Network.

Buffett's Interest