However, Buffett has defended Sokol, saying he does not "feel his Lubrizol purchases were in any way unlawful" and that they did not influence his decision to leave Buffett's investment conglomerate, Berkshire Hathaway.
Sokol, who has run a number of Berkshire subsidiaries, including utility MidAmerican and jet charter business NetJets, was seen as one of the men in the running to replace the Oracle of Omaha when he finally steps down.
Buffett has regularly lavished praise on the executive, telling Fortune last year that Sokol "gets more done in a day than probably I get done in a week" and giving him a huge compliment in his letter to shareholders earlier this year.
"I can't overstate the breadth and importance of Dave Sokol's achievements at this company," Buffett said of Sokol's role at NetJets.
But Sokol's shock resignation has clearly caught Buffett by surprise.
Buffett says Sokol gave his reasons for departing as a desire to work on philanthropic interests and a wish to start an enterprise that would "provide opportunity for my descendents".
However, it is the circumstances surrounding Berkshire's $9 billion acquisition of Lubrizol that makes this such a controversial corporate change.
Buffett says Sokol brought the idea for purchasing Lubrizol to him on either January 14 or 15.
But Buffet revealed in a statement on Sokol's resignation that he learned two weeks ago that Sokol had purchased shares in Lubrizol on four different occasions between December 14 and January 7, just a week before Sokol presented the idea of a takeover to Buffett.
"Initially, I was unimpressed, but after his report of a January 25 talk with its CEO, James Hambrick, I quickly warmed to the idea. Though the offer to purchase was entirely my decision, supported by Berkshire's Board on March 13, it would not have occurred without Dave's early efforts," Buffett said in a statement.
Buffett has dismissed the idea of any conflict.
"Dave's purchases were made before he had discussed Lubrizol with me and with no knowledge of how I might react to his idea. In addition, of course, he did not know what Lubrizol's reaction would be if I developed an interest."
"Furthermore, he knew he would have no voice in Berkshire's decision once he suggested the idea; it would be up to me and Charlie Munger, subject to ratification by the Berkshire Board of which Dave is not a member."
"Neither Dave nor I feel his Lubrizol purchases were in any way unlawful."
However, US market watchers say the resignation of Sokol represents a rare problem with the corporate reputations of Berkshire Hathaway.
"Especially in a situation like this, the brand is everything. Often, when you violate that brand for any reason whatsoever, your goose is cooked," fixed income portfolio manager at Cabot Money Management William Larkin told Reuters.
"I have not ever heard of something like that coming from Berkshire."
With Sokol out of the race for Buffett's job, attention is likely to focus on Greg Abel, CEO of MidAmerican, Matthew Rose, CEO Northern Burlington and hedge fund manager Todd Coombs.
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