Warren Buffett to Fox Business: I'll Remain Silent on Wells Fargo for Now
If history is any guide, Buffett can't be thrilled about the ethics lapse.
25 years ago this month, Buffett testified before a Congressional sub-committee regarding the Salomon Brothers bond scandal. Buffett had become a major shareholder in Salomon when it was revealed that traders had been submitting false Treasury bond bids in order to skirt trading rules. Buffett swiftly took over as CEO and fired a number of management.
At the time, he said during the testimony, "Lose money for my firm and I will be understanding; lose a shred of reputation for the firm, and I will be ruthless."Whipping Wells Fargo - The bank blundered, and the politicians will make it pay.
Now we see that even bread-and-butter retail can lead to political retaliation as Senators call for Mr. Stumpf to resign and demand a criminal investigation. Readers know that unauthorized accounts are an affront to customers, but Senate progressives on Tuesday described sales targets as inherently evil. Senators also want executive-pay clawbacks, though the scandal has hardly dented bank earnings.
Mr. Stumpf, who will be lucky to survive as CEO, is learning the hard way that as long as banks remain public utilities they are a lousy business.Comment: "Buffett's Berkshire Hathaway (BRK.B) holds a near 10% stake in Wells Fargo (WFC). The Oracle of Omaha has been a longtime fan of the company but his silence may speak more loudly after Wells Fargo CEO John Stumpf gave a rocky performance on Capitol Hill before the Senate Banking Committee Tuesday morning. " My view below:
Wells Fargo once a "most admired" company! Since breaking of the scandal, Wells Fargo has lost $ 25 Billion in Market Capitalism. "“The stock has gone from loved to loathed in two to three weeks"
Wells Fargo is absolutely getting hammered on social media. Snip from Facebook below:
Updated: Multiple fired Wells Fargo employees report to CNN that they were fired after calling ethics hotline.