Watchdog slaps a life ban on former top Buffett exec in UK

One of Warren Buffett's former top executives in the UK was today banned for life from working in the financial services industry after a near four-year campaign by the Financial Services Authority.

FSA director of enforcement Margaret Cole said Milan Vukelic, the former senior executive at Buffett's General Reinsurance Life, "fought every inch of the way" to try to avoid today's ban. Vukelic was chief executive of Gen Re offshoot Alternative Solutions and subsidiaries Faraday Reinsurance and later Faraday Underwriting.

A former colleague of his, John Byrne, accepted the case against him three years ago and was banned in the UK and Australia for five years. In America, Gen Re executives pleaded guilty to arranging reinsurance for the giant American Insurance Group, which later became one of the biggest financial bailouts in the country.

The FSA found Vukelic "was responsible for overseeing and structuring three transactions that were designed to allow client insurance companies to hide very significant losses in their accounts". It added: "Vukelic knew the deals were not genuine reinsurance transactions, and that they could be used to mislead the clients' auditors."

Two of the three insurance companies, which were all Australian, later collapsed. The Financial Services and Markets Tribunal, which today overturned Vukelic's appeal, said he had "turned a blind eye" to the nature of the contracts and was "reckless as to whether they were intended to mislead auditors and others".

Cole said: "There is no place in financial services for the sort of behaviour demonstrated by Vukelic."

She added that today's case reinforced recent statements by the FSA that it plans to make it clear to senior management they are responsible for their own and their employees' actions.

Vukelic was suspended by Buffett's Berkshire Hathaway vehicle shortly after the dodgy deals came to light in May 2005. He was fired in July 2005.