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. Last Updated: 07/27/2016

Buffett May Reduce Stake in Salomon

NEW YORK -- Investor Warren Buffett, the largest single stakeholder in Salomon Inc., said he is considering a complex securities swap that could further reduce his stake in the Wall Street firm.

However, Buffett also said in his filing with federal regulators that he has decided to convert 140,000 shares of his preferred Salomon stock into common shares instead of cashing them in Oct. 31, as is his option.

Last October, Buffett, whose every move is scrutinized for signs of where investors should put their money, opted to cash in $140 million of preferred Salomon shares rather than convert them to common stock.

"I feel Salomon has made a great deal of progress since I was looking at this same decision a year ago," the billionaire investor said Thursday in a statement. Salomon has reported a rebound in its financial results in recent quarters, recovering from a prolonged slump in trading profits.

Buffett controls Berkshire Hathaway, the aggressive investment conglomerate out of Omaha, Nebraska, with interests in everything from Coca-Cola to Capital Cities/ABC to Geico insurance.

If Buffett decides to go ahead with the proposed securities exchange, it would be the latest reduction of Buffett's stake in a Wall Street firm he helped rescue from a Treasury auction scandal in the early 1990s, when he stepped in temporarily to run the firm and helped restore its credibility.

He revamped management, installed new controls, personally apologized to the U.S. government and generally helped restore Salomon's credibility with the investment community.