Friday, December 28, 2007
Warren Buffett's Berkshire Hathaway is in the news today.
First, it is going into the municipal bond insurance business, providing another source of bond insurance for municipalities and competing with the large bond insurers whose triple-A ratings are at risk because of mortgage loans. The Berkshire Hathaway Assurance Corp. expects to charge premium rates for its Berkshire Hathaway name. WSJ, Buffett to Start A Bond Insurer For Cities, States.
Second, a judge ruled that Berkshire Hathaway and its subsidiary General Reassurance must respond to subpoenas in the upcoming criminal trial of former General Re CEO Ronald Ferguson and other former General Re employees. They are accused of helping AIG create sham reinsurance contracts to inflate AIG's reserves. Ferguson claims that Buffett approved the transactions, which Buffett has denied. NYTimes, General Re Subpoenas Supported.