First reported in an article on Fortune.com, it looks like Warren Buffett’s Berkshire Hathaway has had enough of Wells Fargo.
Berkshire Hathaway said on Wednesday that it has withdrawn its application to the Federal Reserve to boost its ownership stake in Wells Fargo above 10 percent, and is instead selling 9 million shares to keep it below that threshold.
After months of talks with federal officials, Berkshire Hathaway brk.a. said, “the commitments that would be required of us” to maintain a higher stake “would materially restrict our commercial activity with Wells Fargo.”
It also said “investment or valuation considerations” were not factors in the sale of the 9 million shares, which the holding comany had begun on Monday and expects to complete by early July.
Buffett told CNBC television on Feb. 27 that Wells Fargo made a “huge mistake.” He was referring to the bank’s choice of not immediately addressing the unauthorized accounts.
Currently Berkshire has the most shares of any other holder in Wells Fargo.
Wells Fargo has been on a roller coaster in the last year since it was revealed that the company was involved with an unauthorized opening of customer accounts scandal.
Wells Fargo announced this week that it would pull back an additional $75 million of compensation from the executives that were most responsible for the scandal, including former CEO John Stumpf and former community banking chief Carrie Tolstedt.
Berkshire said it will sell more Wells Fargo shares as necessary to keep its ownership stake “slightly below 10 percent.” This includes additional sales that may become necessary if the bank repurchases its own stock.
Disclaimer: We have no position in Wells Fargo & Co. (NYSE: WFC) and have not been compensated for this article.