Warren Buffett Discusses Wells Fargo (WFC) Accounts Scandal - TheStreet

NEW YORK (TheStreet) -- Billionaire investor Warren Buffett's Berkshire Hathaway (BRK.A, BRK.B) holds a large stake in Wells Fargo (WFC) - Get Report and this afternoon he finally broke his silence about the bank's recent accounts scandal in a phone interview with CNBC's Becky Quick, which she discussed on Thursday afternoon's "Closing Bell." 

Earlier today, a report came out that Buffett had expressed his anger about the scandal to the board, but Buffett denied those reports, Quick said. "That is dead wrong," he said, according to Quick. 

Doing so would have been going behind Wells Fargo CEO John Stumpf's back, he told Quick. 

At Stumpf's hearing before the House Financial Services Committee today, Stumpf said that he had spoken with Buffett, and Buffett confirmed that to Quick. 

Buffett first spoke with Stumpf two weeks ago from tomorrow after watching Stumpf's interview with The Street's Jim Cramer on CNBC's "Mad Money," she said. The conversation was about five minutes, and he told Stumpf that the issue was probably bigger than Stumpf believed it to be.

The $185 million fine the company was hit with may seem small for the big bank, but the real issue was deeper, Buffett told Stumpf. The CEO agreed that he had initially underestimated the problem, but also claimed that he now understands its magnitude, Quick said. 

Some rumors have said that Berkshire Hathaway is actually looking to buy up more of Wells Fargo's shares rather than sell them. 

Buffett said that his firm can't buy more shares at this point as it would need the Federal Reserve's approval since it already owns over 10% of the company. 

When she asked whether he will stay in Wells Fargo, Buffett insisted that he never tells people whether he will stay in a stock or not.

Buffett also noted that he does not condone the illegal practices carried out by some employees of Wells Fargo, Quick added.

Wells Fargo is currently under intense scrutiny after it was disclosed that some of the bank's employees allegedly opened millions of fraudulent accounts for customers, in an effort to boost their sales numbers to meet aggressive sales goals. 

(Wells Fargo is held in Jim Cramer's charitable trust Action Alerts PLUS. See all of Cramer's holdings with a free trial.)

Separately, TheStreet Ratings objectively rated this stock according to its "risk-adjusted" total return prospect over a 12-month investment horizon. Not based on the news in any given day, the rating may differ from Jim Cramer's view or that of this articles's author.

TheStreet Ratings team rates Wells Fargo as a Buy with a ratings score of B. This is driven by a few notable strengths, which the team believes should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks the team covers.

You can view the full analysis from the report here: WFC

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