Buffett could testify against ex-underlings.

Berkshire Hathaway Chairman Warren Buffett will likely testify in a federal trial against five former insurance executives accused of devising a fraudulent finite reinsurance transaction between American International Group Inc. and General Reinsurance Corp.

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The billionaire investor, the third-richest man in the world, is on the government's newly disclosed witness list, along with former AIG Chairman Frank Zarb and equity analyst Jay Cohen of Merrill Lynch. Other current and former AIG and Gen Re executives also are on the list.

Ever since investigators began combing through financial records of Gen Re and AIG for clues into a $500 million finite re transaction that purportedly carried no real risk, Buffett has been cooperating with the government.

On April 11, 2005, he met privately with investigators from the U.S. Securities and Exchange Commission, the U.S. Attorney for the Eastern District of Virginia, and the New York attorney general's office, and was reportedly questioned about the transaction.

The government has indicated Buffett was not aware of the true nature of the transaction because Ronald Ferguson, a former Gen Re chief executive, allegedly made false representations about the arrangement.

Ferguson, Christian Milton, who previously ran AIG's reinsurance unit, and former Gen Re executives Elizabeth A. Monrad, Robert Graham, and Christopher Garand all are charged with securities fraud, mail fraud, and offering false statements to the SEC. Jury selection in the case began Dec. 3 in Hartford, Conn. The trial is set to commence Jan. 7.

Other key government witnesses include Richard Napier, a former Gen Re senior vice president, and John Houldsworth, who was chief executive officer of Cologne Re Dublin, a Gen Re subsidiary. The two pleaded guilty to participating in the alleged sham transaction and have helped the government build its case.

The defendants have indicated they might call current Gen Re CEO Joseph Brandon as a witness.