Berkshire Hathaway Chairman Warren Buffett on Saturday admitted he made a 'big mistake' by not following up on former top deputy David Sokol's revelations of stock purchases which Buffett called violations of the company's insider trading rules.
Federal regulators are currently investigating the incident, according to reports.
"He violated our insider trading rules and he violated the principles I lay out every two years to our managers," Buffett said during the company's annual meeting in Omaha, Nebraska, according to Bloomberg.
"I made a big mistake by not saying, 'well, when did you buy it?'" Buffett told shareholders today.
Sokol, who managed several of Berkshire's companies, resigned in May to pursue other business opportunities.
In December, Sokol purchased $10 million in shares of chemical company Lubrizol. A month later, he suggested to Buffett that the company should buy the entire company.
When Berkshire Hathaway announced it was buying the company in March, Sokol earned $3 million when the shares of the stock rose.
Buffett said he only realized the extent of Sokol's holdings on March 19, five days after Berkshire announced the purchase.