BUILDING STORIES NEW ORLEANS — Billionaire investor Warren Buffett’s Berkshire Hathaway will pay a $1.3 billion fine to settle allegations that it deceived buyers about the quality of its materials and that it misled brokers about the risks of buying the homes it listed.
The deal announced Tuesday will prevent Berkshire from being subject to civil fines for the past five years.
It’s a big win for the government’s investigation of the housing collapse, but it’s also a blow to the company.
Berkshire is facing a civil fine of $2.9 billion for its role in a scheme to mislead investors and brokers in 2007 about the safety of JB Welding materials used in the construction of the Empire State Building.
Berkshire has agreed to pay $1 billion to settle charges that it falsely advertised the quality and performance of the building materials it used in building the Empire state building.
The company will also pay a civil penalty of $500 million to settle the case.
Berkshire has been the target of numerous government investigations over the years.
The Justice Department’s civil case against the company, which began in 2015, has been ongoing for more than a year.
At a news conference announcing the settlement, U.S. Attorney Joon H. Kim said the company’s conduct was so egregious that it would “tend to cause lasting damage to the trust the government has placed in Berkshire.”
Berkshire also agreed to conduct an independent audit of its safety and security practices in the future.
The government’s probe has led to a series of reforms in the building trades that have made it more difficult for the country’s builders to get their materials to market.
Bernstein estimated that the settlement could cost Berkshire between $50 billion and $70 billion.