TheChek News Flow

Ofwat is likely to be making decisions that affect household bills and infrastructure improvements for another decade

Britain’s privatised water companies are pushing the government to speed up plans to abolish Ofwat, warning that the slow pace of reform means the regulator’s influence over bill increases and infrastructure investment will last for the next 10 years.

A government white paper, released last week, confirmed its plans to create a new super regulator that merges Ofwat, the Environment Agency and the Drinking Water Inspectorate in England and Wales.

But the document has been criticised for a lack of detail on timing or how the body would work.

Ministers say the reforms will help “clean up” the industry, which is accused of paying excessive returns to shareholders and executives, while failing to invest in infrastructure leading to sewage pollution and water outages.

Water UK, which represents the utilities, also criticised the government for being too slow in abolishing a system that it says is “complex, too expensive and too slow.”

“The UK government committed to scrap Ofwat over six months ago, so it is frustrating to see that the same regulator will be making decisions that affect bills and investment until 2035 — a decade on from its announced abolition,” the industry lobby group said.

Water UK called on ministers to set up the new regulator in ‘shadow’ mode to allow it to start making decisions.

The government’s plans mark the biggest legislative change since privatisation 35 years ago and will involve rewriting the Water Industry Act.

But the bill is unlikely to be laid before parliament until the second half of this year or early 2027 and will be subject to amendments amid objections from environmentalists and industry.

As the water companies are monopolies that rely on customer bills to cover their costs, Ofwat sets out every five years how much households can be charged to fund investment, maintenance and investor returns.

Although the next regulatory period runs from 2030 to 2035, water companies start working on their submissions to Ofwat much earlier.

Ofwat said: “The government expects Ofwat, working with DWI, EA and Natural England, to deliver the government’s reform intent in the next price review. In the meantime, our work continues.”

Water UK argues the uncertainty over the new regulator will deter investors and reduce the chance of much-needed equity injections to shore up the industry’s debt-laden balance sheets.

The UK’s 16 privatised water companies are saddled with £82.7bn of net debt, and nine of them are being monitored by Ofwat amid concerns for their financial survival.

The white paper includes plans for a new “performance improvement regime” for struggling companies though there is little information on how it would work.

A new chief engineer would also be appointed to the regulator to monitor infrastructure and there will be a requirement for more frequent health checks and mapping of pipes and other assets.

Charlie Maynard, Liberal Democrat MP, said more detail was needed on how the new super regulator would work. “The government’s plans are vague on what new resources or powers this body will get to succeed where its predecessors failed,” he added.

As well as being criticised by customers for failing to properly hold water companies to account, the industry accuses Ofwat of making water companies “uninvestable” by not allowing them to raise bills to the level needed, imposing punitive fines and an overly complex regulatory system.

The government said it will publish a “transition plan” in coming weeks setting out how the regulators and water companies should operate until the new super regulator gets Royal Assent.

Emma Reynolds, environment secretary, said: “These are once-in-a-generation reforms for our water system — tough oversight, real accountability, and no more excuses.”

Environmentalists and pro-nationalisation campaigners criticised the government’s reforms for not going far enough.

Cat Hobbs, of the We Own It campaign group, accused the government of “outsourcing responsibility”.

“The elephant in the room is that privatisation and regulation have failed since 1989,” she said. “The government’s promise of ‘stability for investors’ comes directly at the expense of households. Every penny of investment into the system has come from our bills.”

The head of Airbus has warned staff that the plane maker must be ready to adapt to unsettling new geopolitical risks after facing “significant” logistical and financial damage from US protectionism and US-China trade tensions last year.

“The beginning of 2026 is marked by an unprecedented number of crises and by unsettling geopolitical developments. We should proceed in a spirit of solidarity and self-reliance,” CEO Guillaume Faury said in an internal letter seen by Reuters.

“The industrial landscape in which we operate is sown with difficulties, exacerbated by the confrontation between the U.S. and China.”

Faury did not identify geopolitical developments in the memo, which was circulated last week against the backdrop of disunity between Washington and allies over Greenland and the role of NATO. Airbus is a major European defense supplier.

He said multiple trade pressures had already “caused significant collateral damage, logistically and financially.”

Last April, President Trump announced sweeping tariffs, prompting Chinese restrictions on rare earth exports. Washington later temporarily froze exports of engines and other key components to China, which uses them for its C919 jet. US parts are also needed for Airbus jets assembled in China.

Aerospace has won a partial reprieve from US tariffs.

Despite trade upheaval, Faury congratulated the group’s 160,000 staff for what he termed “good results” overall in 2025 without elaborating. Airbus publishes results on Feb. 19.

Airbus Defense and Space “is now on a much stronger footing thanks to its deeper restructuring,” he said. Airbus Helicopters is “remarkably consistent in the strength of its performance”.

Faury said it was “imperative” that Airbus learn from its biggest ever recall in November, involving a software upgrade.

Days later, Airbus was forced to cut delivery goals due to flawed fuselage panels but maintained financial goals — due in part, Faury said, to progress on a commercial cost-cutting plan.

“We must be more rigorous in managing our systems and products in general,” Faury said.

He said post-COVID supply chains had improved but remained a source of disruption.

“Our most serious difficulties have been with the Pratt & Whitney and CFM engines,” Faury said.

Recently retired commercial CEO Christian Scherer said earlier this month that A320-family engines continued to arrive late and singled out Pratt & Whitney, which declined to comment.

Faury signaled a focus on the bottom line for the rest of this decade, building up a warchest as Airbus and Boeing gird for their next aircraft development battle.

The 2030s will be dominated by development of an A320 successor to enter service in the “latter part of the decade,” he said. Boeing is widely expected to follow a similar path, though it has said its near-term priority is reducing debt.

“Achieving profitable growth in the second half of the 2020s is essential: we need to approach this crucial (2030s) period in truly ‘Olympic’ shape,” Faury told employees. “The future of Airbus will depend on our ability to execute this strategy.”

Sunny Sethi, founder of HEN Technologies, doesn’t sound like someone who’s disrupted an industry that has remained largely unchanged since the 1960s. His company builds fire nozzles — specifically, nozzles that it says put out fires up to three times faster than earlier products while conserving 67% of water. But Sethi is matter-of-fact about this achievement, more focused on what’s next than what’s already been done. And what’s next sounds a lot bigger than fire nozzles.

His path to firefighting doesn’t follow a tidy narrative. After nabbing his PhD at the University of Akron, where he researched surfaces and adhesion, he founded ADAP Nanotech, an outfit that developed a carbon nanotube-based portfolio and won Air Force Research Lab grants. Next, at SunPower, he developed new materials and processes for shingled photovoltaic modules. When he landed next at a company called TE Connectivity, he worked on devices with new adhesive formulations to enable faster manufacturing in the automotive industry.

Then came a challenge from his wife. The two had moved from Ohio to the East Bay outside San Francisco in 2013. A few years later came the Thomas Fire — the only megafire they’d ever see, they thought. Then came the Camp Fire, then the Napa-Sonoma fires. The breaking point came in 2019. Sethi was traveling during evacuation warnings while his wife was home alone with their then three-year-old daughter, no family nearby, facing a potential evacuation order. “She was really mad at me,” Sethi recalls. “She’s like, ‘Dude, you need to fix this, otherwise you’re not a real scientist.’”

A background spanning nanotechnology, solar, semiconductors, and automotive had made his thinking “bias free and flexible,” as he puts it. He’d seen so many industries, so many different problems. Why not try to fix the problem?

In June 2020, he founded HEN Technologies (for high-efficiency nozzles) in nearby Hayward. With National Science Foundation funding, he conducted computational fluid dynamics research, analyzing how water suppresses fire and how wind affects it. The result: a nozzle that controls droplet size precisely, manages velocity in new ways, and resists wind.

In HEN’s comparison video, which Sethi shows me over a Zoom call, the difference is stark. It’s the same flow rate, he says, but HEN’s pattern and velocity control keep the stream coherent while traditional nozzles disperse.

But the nozzle is just the beginning — what Sethi calls “the muscle on the ground.” HEN has since expanded into monitors, valves, overhead sprinklers, and pressure devices, and is launching a flow-control device (“Stream IQ”) and discharge control systems this year. According to Sethi, each device contains custom-designed circuit boards with sensors and computing power — 23 different designs that turn dumb hardware into smart, connected equipment, some powered by Nvidia Orion Nano processors. Altogether, says Sethi, HEN has filed 20 patent applications with half a dozen granted so far.

The real innovation is the system these devices create. HEN’s platform uses sensors at the pump to act as a virtual sensor in the nozzle, tracking exactly when it’s on, how much water flows, and what pressure is required. The system captures precisely how much water was used for a given fire, how it was used, which hydrant was tapped, and what the weather conditions were.

Why it matters: Fire departments can run out of water otherwise, because there’s no communication between water suppliers and firefighters. It happened in the Palisades Fire. It happened in the Oakland Fire decades earlier. When two engines are connected to one hydrant, pressure variations can mean that one engine suddenly gets nothing as a fire continues to grow. In rural America, water tenders, which are tankers shuttling water from distant sources, face their own logistical nightmares. If they can integrate water usage calculations with their own utility monitoring systems to optimize resource allocation, that’s a giant win.

So HEN built a cloud platform with application layers, which Sethi likens to what Adobe did with cloud infrastructure. Think Individual à la carte systems for fire captains, battalion chiefs, and incident commanders. HEN’s system has weather data; it has GPS in all devices. It can warn those on the front lines that the wind is about to shift and they’d better move their engines, or that a particular fire truck is running out of water.

The Department of Homeland Security has been asking for exactly this kind of system through its NERIS program, which is an initiative to bring predictive analytics to emergency operations. “But you can’t have [predictive analytics] unless you have good quality data,” Sethi notes. “You can’t have good quality data unless you have the right hardware.”

If building a predictive analytics platform for emergency response sounds daunting, Sethi says actually selling it is tougher, and he’s proudest of HEN’s traction on that front.

“The hardest part of building this company is that this market is tough because it’s a B2C play when you think of convincing the customers to buy, but the procurement cycle is B2B,” he explains. “So you have to really make a product that resonates with people — with the end user — but you still have to go through government purchasing cycles, and we have cracked both of those.”

The numbers bear this out. HEN launched its first products into the market in the second quarter of 2023, lining up 10 fire departments and generating $200,000 in revenue. Then word started to spread. Revenue hit $1.6 million in 2024, then $5.2 million last year. This year, Hen, which currently has 1,500 fire department customers, is projecting $20 million in revenue.

HEN has competition, of course. IDEX Corp, a public company, sells hoses, nozzles, and monitors. Software companies like Central Square serve fire departments. A Miami company, First Due, which sells software to public safety agencies, announced a massive $355 million round last August. But no company is “doing exactly what we are trying to do,” insists Sethi.

Either way, Sethi says that the constraint isn’t demand — it’s scaling fast enough. HEN serves the Marine Corps, US Army bases, Naval atomic labs, NASA, Abu Dhabi Civil Defense, and ships to 22 countries. It works through 120 distributors and recently qualified for GSA after a year-long vetting process (that’s a federal seal of approval that makes it easier for military and government agencies to buy).

Fire departments buy about 20,000 new engines each year to replace aging equipment in a national fleet of 200,000, so once HEN is qualified, it becomes recurring revenue (is the idea), and because the hardware generates data, revenue continues between purchase cycles.

HEN’s dual goal has required building a very specific team. Its software lead was formerly a senior director who helped build Adobe’s cloud infrastructure. Other members of HEN’s 50-person team include a former NASA engineer and veterans from Tesla, Apple, and Microsoft. “If you ask me technical questions, I would not be able to answer everything,” Sethi admits with a laugh, “but I have such good teams that [it] has been a blessing.”

Indeed, it’s the software that hints at where this gets interesting, because while HEN is selling nozzles, it’s amassing something more valuable: data. Highly specific, real-world data about how water behaves under pressure, how flow rates interact with materials, how fire responds to suppression techniques, how physics works in active fire environments.

It’s exactly what companies building so-called world models need. These AI systems that construct simulated representations of physical environments to predict future states require real-world, multimodal data from physical systems under extreme conditions. You can’t teach AI about physics through simulations alone. You need what HEN collects with every deployment.

Sethi won’t elaborate, but he knows what he’s sitting on. Companies training robotics and predictive physics engines would pay handsomely for this kind of real-world physics data.

Investors see it, too. Last month, HEN closed a $20 million Series A round, plus $2 million in venture debt from Silicon Valley Bank. O’Neil Strategic Capital led the financing, with NSFO, Tanas Capital, and z21 Ventures participating. The round brought the company’s total funding to more than $30 million.

Sethi, meanwhile, is already looking ahead. He says the company will return to fundraising in the second quarter of this year.

More than 40% of the country under severe weather warnings with emergency orders in place

A severe winter storm ripping across the south and east of the US has caused mass power outages and the cancellation of thousands of flights.

More than 870,000 people across the country are without power, according to tracking website Poweroutage.com. The hardest hit were the states of Texas, Mississippi, Tennessee and Louisiana.

Nearly 18,000 flights from Saturday to Monday have been cancelled across the US, according to flight-tracking site FlightAware, leaving passengers stranded at airports across the US.

Airlines cut more than 11,130 flights on Sunday alone. Sunday’s cancellations were the highest number since the pandemic, according to aviation consultancy Cirium.

Major carriers such as American Airlines cut 46 per cent of its Sunday schedule, while Jet Blue has scrapped as much as 70 per cent. Some airports have almost grounded to a halt, with over 90 per cent of flights from LaGuardia, Reagan National and Philadelphia cancelled on Sunday.

Some 40 per cent of the country was under a winter storm warning by Saturday evening.

President Donald Trump announced emergency declarations to deal with the impact of the storms in South Carolina and Virginia. “With the help of FEMA and our State partners, we will keep everyone safe, and make sure both States have the support they need,” he posted on Truth Social.

As Winter Storm Fern travels eastward, power companies were braced for snow, freezing rain and sleet to hit the grid system, with helicopters and line construction crews being dispatched to identify damage and carry out swift repairs.

Georgia Power urged its customers to prepare for two to three-day outages, while Dominion Energy in Virginia warned that icy conditions could knock out power in the region for days.

Governors of Virginia, North Carolina, South Carolina and Georgia declared a state of emergency. On Thursday energy secretary Chris Wright ordered grid operators to make more than 35 gigawatts of backup generation available to prevent blackouts.

Power outages cost the US $44bn last year, according to the Department of Energy’s National Laboratories.

Fern is drawing comparisons to Winter Storm Uri, which led to mass blackouts and loss of life across Texas in 2021. Temperatures are expected to drop to the low teens and single digits Fahrenheit, with wind-chill factors of minus 10F to 0F (minus 23C to minus 17C).

Ercot, the grid operator for Texas, has said it is ready for the storm and has sufficient generation to meet demand.

“The same risk of power outages due to lower natural gas production still applies, as natural gas wells can freeze in temperatures below freezing,” said Mark Callahan, director of Americas natural gas pricing at S&P Global Energy. “However, conditions for this storm are not as bad, and work has been done since 2021 to winterise the grid for such events.”

While the state is better prepared due to grid modernisation efforts and the rise of home generators, “the buffers in the system are much more constrained” by rising power demand from data centres and electrification of household appliances, said Didi Caldwell, chief executive of Global Location Strategies.

PJM, the grid operator which serves more than 67mn people in the north-east and Midwest, said temperatures could reach single digits Fahrenheit across the region and dip below zero in the west.

“This is a formidable Arctic cold front coming our way,” said Mike Bryson, senior vice-president of operations at PJM. “We will be relying on our generation fleet to perform as well as they did during last year’s record winter peak.”

Natural gas was trading at elevated levels, with prices around $28 at Henry Hub, Louisiana, $34 in Chicago and $60 to $100 in the Northeast and East Coast on Friday, noted analysts at S&P.

However, this is “much lower than the $1,000 prices we saw during Uri”, said Callahan.

Retailers Amazon and DoorDash said they would balance deliveries of consumer staples while prioritising the safety of their workers. At least 21 Walmarts across the country were closed.

Companies had been discussing roughly $30 billion deal

Merck MRK -0.92%decrease; red down pointing triangle is no longer in discussions to buy biotech Revolution Medicines RVMD -0.99%decrease; red down pointing triangle, according to people familiar with the matter.

Merck had recently been in talks to acquire RevMed in a deal that could have valued the cancer-drug biotech at around $30 billion.

The talks cooled after the two couldn’t come to an agreement on price, some of the people said.

It is always possible talks could restart or another suitor for RevMed could emerge. RevMed is expected to release closely watched testing data for its pancreatic and colorectal cancer drug candidates during the first half of this year.

The Journal reported earlier this month that AbbVie was in advanced talks for a deal for Revolution, which was drawing interest from multiple suitors. AbbVie later said it “is not in discussions” with Revolution.

Revolution had a market value of around $16 billion before news of the deal talks earlier in January. The stock rose following the reports, giving the company a value above $22 billion as of Friday.

Merck Chief Executive Robert Davis said at the J.P. Morgan Healthcare Conference earlier this month the company has been largely focused on deals up to $15 billion in size. He added that the company is willing to do even bigger deals but will be focused and disciplined.

Revolution is developing drugs that target a molecular driver of cancers known as RAS. Revolution’s experimental drugs seek to block the driver, thereby thwarting common cancers including lung, pancreatic and colon that have proven difficult to treat.

For decades, researchers have pursued therapies that hit RAS because of its key role in multiple cancers and other diseases, but the target had appeared “undruggable” because of the technical challenges hitting it.

Revolution Medicines’ drug candidates promise to crack the problem. If its pancreatic-cancer drug candidate proves to work safely, it could dominate treatment of the disease and generate $10 billion in 2035 worldwide sales, Mizuho Securities analysts said.

Cancer treatment is among the most important—and lucrative—markets for the pharmaceutical industry. Its drugs command six-figure yearly prices and notched more than $240 billion in worldwide sales last year, according to market-research firm Evaluate.

Senate Democratic leader Schumer says lawmakers should split off and pass other funding measures amid anger over Minneapolis shooting

WASHINGTON—Senate Democrats angered by the deadly shooting in Minneapolis said they wouldn’t vote for a government funding package without major changes to its homeland security provisions, raising the possibility of a partial government shutdown this coming weekend.

Senate Minority Leader Chuck Schumer (D., N.Y.) said Sunday that Republicans should work with Democrats to instead advance the other five funding bills in the package while lawmakers rewrite the Department of Homeland Security measure. Democrats are demanding constraints on DHS’s immigration enforcement activities and more oversight.

Schumer said lawmakers need to overhaul immigration enforcement to “protect the public.” He said reworking the DHS bill while passing the remaining five—which include military and health funding—was the “best course of action, and the American people are on our side.”

Republicans control the Senate 53-47, but 60 votes are needed to advance most legislation. Senate Appropriations Committee Chair Susan Collins (R., Maine) is exploring all options for the legislation, a spokeswoman said.

The Homeland Security funding is wrapped into a broader package covering about $1.3 trillion in annual spending. The Democrats’ call for changes raised the prospect of Congress running out of time before funding for much of the federal government expires at 12:01 a.m. on Jan. 31, which would trigger a partial government shutdown. The House has already passed all six measures but it would need to approve any changes the Senate makes before it goes to President Trump’s desk—and the House is on recess this coming week.

With the new government funding deadline looming, many Senate Democrats had wanted to avoid another shutdown after a record-setting funding lapse last year. But the deadly shooting of a 37-year-old man in Minneapolis by a U.S. Border Patrol officer changed the dynamic, aides and lawmakers said, uniting the party in taking a hard line. The Trump administration has surged border-control officers into the city as part of a crackdown on illegal immigration, sparking protests and physical confrontations.

Many Senate Democrats—including some who broke with the majority of their party in November and voted to reopen the government—issued fiery statements Saturday saying they wouldn’t back any funds for DHS, the agency that includes the U.S. Border Patrol and Immigration and Customs Enforcement.

“Enough is enough,” said Sen. Jacky Rosen (D., Nev.), who last year was one of eight Democrats to join Senate Republicans in voting to end the shutdown. “I have the responsibility to hold the Trump administration accountable when I see abuses of power,” she said.

Sen. Catherine Cortez Masto (D., Nev.)—who consistently voted to keep the government open last year—said that she couldn’t support funding for DHS, saying agents were “oppressing Americans.”

In a sign that frustration with the Trump administration’s approach extends across the aisle, House Homeland Security Committee Chairman Andrew Garbarino (R., N.Y.) said that he has asked top DHS officials including Customs and Border Protection Commissioner Rodney Scott to testify before the panel. Rep. Michael McCaul (R., Texas) also called for an investigation.

Republican senators have largely backed the Trump administration’s immigration crackdown, but there were signs of growing concern. Sen. Bill Cassidy (R., La.) said the “events in Minneapolis are incredibly disturbing” and called for a joint federal-state investigation. Sens. Pete Ricketts of Nebraska and Thom Tillis of North Carolina also joined the calls for a full investigation.

The office of Senate Majority Leader John Thune (R., S.D.) didn’t respond to a request for comment.

House Democrats are pushing their Senate colleagues to drive a hard bargain. Rep. Greg Casar (D., Texas), chair of the House progressive caucus, put out a list of key demands Sunday. They include a demand that immigration-enforcement officials leave Minneapolis and other cities; a full, independent investigation into the killings in Minneapolis; and no use of masks by federal agents.

Next week the Senate has been expected to take up six bills that fund the military and social services—the bulk of federal discretionary spending—for the remainder of fiscal 2026, which runs through September. Until the Saturday shooting, many Democrats had been expected to join Republicans in passing the measures, which have been bundled together as one vote.

The House last week passed the final four of the 12 annual spending bills, including those funding DHS and the Pentagon—typically a GOP priority—and the Labor Department and the Health and Human Services Department, whose priorities are favored by Democrats. Together, those four measures would provide more than $1.2 trillion of the more than $1.6 trillion in the government’s discretionary spending for fiscal 2026. The House packaged those four bills plus two more into a single measure and sent it to the Senate.

Voting against the DHS measure will do little in the short term to curtail immigration enforcement. Trump’s major legislative achievement—which he dubbed the “one big beautiful bill”—provided $4.1 billion to hire and train additional border-patrol agents. Republicans used a special procedure to pass that bill along party lines with no Democratic support.

Precious metal’s prices rise above the figure for the first time

Gold prices climbed above the psychologically important $5,000-an-ounce level for the first time, as investors sought the refuge of safe-haven assets on fears that the U.S. federal government might shut down for the second time in months.

Spot gold rose 1.2% to $5,049.68 a troy ounce on Monday after earlier touching a record high of $5,052.02 per ounce, ICE data showed. Spot silver also rose 3.8% to $107.22 an ounce after hitting a fresh all-time high of $107.30 per ounce earlier.

The risk of a government shutdown emerged as Senate Democrats, angered by the shooting in Minneapolis, said they wouldn’t vote for a government funding package without major changes to the homeland security provisions. The Democrats’ call for changes raised the prospect of Congress running out of time before funding for much of the federal government expires at 12:01 a.m. on Jan. 31, which would trigger a partial government shutdown.

Meanwhile, President Trump on his Truth Social platform on Saturday warned that the U.S. would impose 100% tariffs on all Canadian goods and products coming into the U.S. if “Canada makes a deal with China.” Trump’s remarks threatened a major escalation in a brewing trade conflict with Canada.

“Precious metals show no signs of stopping on the upside,” Sucden Financial said in commentary. “This momentum appears relentless, and for us, the question is not the directional view but how long market participants can finance these gains,” it added.

Precious metals have surged this year, driven by uncertainty in global economics and politics amid volatility in financial markets.

Some of those issues included the broad imposition of U.S. tariffs early last year, the U.S. seizure of Venezuelan strongman Nicolás Maduro, and increased concerns over the Federal Reserve’s independence. More recently, Trump’s efforts to take control of Greenland sent the post-World War II alliance between the U.S. and its European partners into its worst crisis in over 70 years.

Spot gold has jumped around 17% year to date, while silver has powered roughly 50% higher, ICE data showed.

In taking over as chief executive of Berkshire Hathaway BRK.B -1.14%decrease; red down pointing triangle this month, Greg Abel faced questions about whether he is ready to step out of Warren Buffett’s shadow.

But the transition reminded some investors of another executive—Abel’s former boss—who for years was considered most likely to take the reins at one of the world’s best-known companies.

David Sokol gained Buffett’s confidence as a star executive who grew crucial businesses at Berkshire and turned others around, while also demonstrating his investing chops. The Omaha, Neb., native could be a demanding manager, according to some who interacted with him, but he was popular with Berkshire’s board and Buffett, who publicly singled him out for his accomplishments.

“He gets more done in a day than probably I get done in a week, and I’m not kidding,” Buffett once told Fortune magazine.

Then in a matter of weeks in 2011, Sokol’s prospects disintegrated after a controversy related to his personal stock trades. His departure from the company became acrimonious, with his lawyer later criticizing how he was treated by Berkshire.

Sokol, 69 years old, hasn’t had much contact with Berkshire Hathaway and its executives since leaving, according to someone close to the matter. But he has expressed pride in Abel and his recent appointment atop Berkshire, a friend said.

Some Berkshire investors remain mystified by Sokol’s rise and fall.

“By all appearances, Sokol was a man of integrity and talent who was poised to replace Buffett,” said Darren Pollock, who runs Cheviot Value Management in Los Angeles, a longtime Berkshire shareholder. “One uncharacteristic and fateful act got in the way.”

The youngest of five children born to a grocery-store manager and a homemaker, Sokol lived at home while attending the University of Nebraska, according to a biography on the website of the Horatio Alger Association, a nonprofit Sokol has supported. He married during his junior year, living with his wife in a trailer. After graduating, Sokol worked as a structural engineer and was eventually hired to run Ogden Projects, a waste-energy business.

In 1991, Sokol was named chief executive of CalEnergy. He turned the company into a sprawling utility, partly through aggressive acquisitions. It purchased MidAmerican Energy in 1998, taking on its name. Sokol earned a reputation for being hard-driving and sometimes difficult, with some nicknaming him “The Great Young God,” a nod to both his intelligence and his ego.

Once, while working on a hostile acquisition of a rival, Sokol became incensed when members of his team wished to take a day off for Yom Kippur, according to two people who worked on the deal. Sokol told them he worked on Christmas, and that he couldn’t understand why others wouldn’t work on their religious holiday. Amid the vitriol, a senior banker asked to be taken off the account.

Jonathan Bram, a founding partner of Global Infrastructure Partners who worked as Sokol’s longtime banker at Credit Suisse, said Sokol expects others to work as hard as he does. “He’s a good person, I never felt that he was unreasonably demanding,” Bram said.

During the same period, Sokol and his family experienced tragedy. In 1999, his youngest child, David Sokol Jr., died from Hodgkin lymphoma, a few weeks after graduating from high school.

“It was extraordinary to watch his inner strength,” Sokol said of his son in the Horatio Alger biography.

In late 1999, Berkshire Hathaway purchased almost 80% of MidAmerican Energy, before eventually buying the rest of the company. Abel was MidAmerican’s president, but Buffett’s public accolades were directed at Sokol, the company’s chief executive.

“If I only had two draft picks out of American business, Walter Scott and David Sokol are the ones I would choose for this industry,” Buffett said at the time of the deal, while also referring to MidAmerican’s largest individual shareholder.

Buffett decided to pay Sokol $50 million and Abel $25 million if the business met certain goals. Sokol pushed back, saying he and Abel should each receive $37.5 million, an act of generosity that impressed Buffett.

Sokol continued to oversee MidAmerican’s growth, while also turning around its NetJets business, which offers shared ownership of jets to the wealthy and companies.

“His ability to improve the fates of Berkshire businesses—from roofing and insulation to real-estate brokering to fractional-jet ownership—earned consistent praise from Buffett,” said Pollock, the Berkshire shareholder.

Sokol is an avowed fan of “Atlas Shrugged,” the 1957 novel by Ayn Rand that made a moral case for capitalism and self interest. In his self-published management book, “Pleased But Not Satisfied,” Sokol wrote of the importance of integrity—and the need to put pressure on employees. He said that he kept a notebook in which he ranked employees “in the order in which I would terminate each member if I was forced to do so one at a time.”

In 2008, Sokol led a $230 million investment in BYD, then a Chinese battery maker, after hearing about the company from investor Li Lu and Charlie Munger, Berkshire’s longtime vice chairman. Sokol traveled to China to investigate the company, and MidAmerican later purchased a 9.9% stake in it.

BYD was a home-run investment for Berkshire, going on to surpass Tesla as the world’s top seller of electric vehicles. Berkshire has since sold its stake in the company.

By early 2011, Sokol had established his stature at Berkshire and was widely seen as Buffett’s successor.

Then in March of that year, Berkshire bought chemicals company Lubrizol in a $9 billion deal. Soon after, it emerged that Sokol had purchased about $10 million of shares of Lubrizol two months earlier, and that the deal had come at his suggestion. The value of Sokol’s stake rose $3 million on the acquisition.

Sokol resigned from Berkshire shortly after his purchase became public. Buffett said at the time that the stock purchases weren’t a factor in Sokol’s decision, saying Sokol expressed a desire to spend more time investing his “family’s resources.”

Later that year, a report by Berkshire Hathaway’s audit committee—which has since been removed by the company from its online archives—said Sokol’s trading violated the “highest standards of business ethics.”

At Berkshire’s annual meeting, Buffett expressed bewilderment about Sokol’s decision, saying he made about $24 million that year—implying that he didn’t need the extra money.

“Dave did not disguise the trading, which, you know, that’s somewhat inexplicable,” Buffett said at the meeting.

Buffett declined to comment when contacted for this article.

In the aftermath of the controversy, Sokol’s attorney criticized the way Berkshire treated him, saying Sokol “deserved better.” The attorney said Buffett was told about Sokol’s ownership of Lubrizol stock.

The Securities and Exchange Commission later said that it wouldn’t take action against Sokol.

Since leaving Berkshire, Sokol has kept a low profile.

In 2017, he paid $19.9 million to buy a seven-bedroom, eight-and-a-half-bathroom home in Fort Lauderdale, Fla. He also has homes elsewhere, according to a friend.

Sokol started an investment firm, Teton Capital, soon after leaving Berkshire to invest his wealth, which amounts to several hundred million dollars, according to people close to the matter. He remains active as an investor, according to a friend.