This article is from the archive of our partner .

Warren Buffett shocked the business world--and sent his company's shares tumbling--late Wednesday by announcing the resignation of David Sokol--a man many speculated would succeed the renowned investor as head of Berkshire Hathaway. Buffett revealed that Sokol personally purchased stock in a company prior to recommending that Berkshire acquire the enterprise, stoking a debate about whether Sokol violated insider trading laws, which prohibit individuals from trading shares based on non-public information.

In a statement, Buffett explained that Sokol bought 96,060 shares in Lubrizol--a manufacturer of engine lubricants--in January before suggesting that Buffett purchase the company, which Berkshire eventually did in March in a $9 billion deal awaiting approval from regulators and shareholders. Bloomberg estimates that Sokol may have earned a $3 million profit by buying the Lubrizol stock, which rose in value after the Berkshire deal was announced. The Securities and Exchange Commission says it's reviewing Buffett's statement, and The Financial Times is reporting that an SEC investigation is already underway.

So, did Sokol engage in insider trading?