Regulators Question Buffett in AIG Inquiry, while Khodorkovsky Faces Fraud and Tax Charges

Strategic Insights -

Billionaire investor Warren Buffett was questioned by regulators Monday in connection with federal and state inquiries into American International Group Inc., a major insurance company. The investigation focuses on transactions between AIG and General Re Corp., a unit of Buffett's holding company, Berkshire Hathaway Inc. Meanwhile, Russian tycoon Mikhail Khodorkovsky ridiculed the fraud and tax charges against him, but the verdict in his trial is expected to be delivered on April 27. Khodorkovsky faces up to 10 years in prison if found guilty.

Key Takeaways:

  • Warren Buffett was questioned by regulators in connection with AIG inquiry, stating "I told them everything I know."
  • The investigation includes a transaction between AIG and General Re Corp., a unit of Berkshire Hathaway Inc.
  • Mikhail Khodorkovsky faces up to 10 years in prison if found guilty of fraud, tax evasion, and other charges.
  • Khodorkovsky accused the charges against him as "politically motivated fantasies of a pulp fiction writer."
  • The trial is expected to deliver a verdict on April 27.
  • A settlement between Microsoft and Gateway Inc. will see Microsoft pay $150 million to Gateway over four years.
  • Gateway will release all antitrust claims against Microsoft based on past conduct as part of the settlement.
  • Microsoft will take a $123 million pretax charge for the settlement and $41 million for a previous settlement with Burst.com.
  • The company will also reserve $550 million to account for other antitrust matters.
  • The interest rate on three-month Treasury bills declined to 2.71%, while the rate on six-month bills rose to 3.065%.
  • The average yield for one-year Treasury bills dropped to 3.33% from 3.38% the previous week.

Statistics:

  • The interest rate on three-month Treasury bills declined by 0.035% to 2.71%.
  • The rate on six-month bills rose by 0.03% to 3.065%.
  • The average yield for one-year Treasury bills dropped by 0.05% to 3.33%.
  • Microsoft will pay $150 million to Gateway over four years.
  • Microsoft will take a $123 million pretax charge for the settlement and $41 million for a previous settlement with Burst.com.
  • The company will also reserve $550 million to account for other antitrust matters.

Sources:

  • "SEC INVESTIGATIONS Regulators question Buffett in AIG inquiry", NEW YORK (AP) 2006.
  • "PETROLEUM Russian tycoon scoffs at fraud and tax charges", MOSCOW (AP) 2006.
  • "COMPUTING Microsoft settles with Gateway for $150 million", SEATTLE (AP) 2006.
  • "INVESTMENTS 3-month T-bill rate falls; rate rises on 6-month bill", WASHINGTON (AP) 2006.