Warren Buffett finally speaks out on Wells Fargo & Co scandal


Berkshire Hathaway (ticker: BRK.A, BRK.B) kingpin Warren Buffett was keeping mum on the Wells Fargo & Co (WFC) – until now, given recent speculation on his opinion of the company. In fact, he went as far as to lambast a report that he is seeking a "radical transformation."

"It's dead wrong to imply I've spoken to the board directly. Going to the board implies I've gone around [Wells Fargo CEO John] Stumpf, the guy who is under fire," Buffett said to CNBC. "I've talked to no one else on the board."OKA

Buffett, who is arguably the best investor of all time, holds 320 million shares of WFC stock, or more than 6 percent of the company. So the man known as the Oracle of Omaha has a keen interest – and significant influence – in Wells Fargo in light of a scandal that has forced Wells Fargo to pay $185 million in settlement fees and an additional $5 million in customer remediation.

See photos of Wells Fargo CEO John Stumpf:

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Wells Fargo CEO John Stumpf
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Wells Fargo CEO John Stumpf
John Stumpf, President and CEO of Wells Fargo, participates in a panel at the 2015 Fortune Global Forum in San Francisco, California November 2, 2015. REUTERS/Elijah Nouvelage
Wells Fargo CEO John Stumpf speaks during a news conference for Wachovia employees at the Wachovia corporate headquarters in Charlotte, North Carolina, October 15, 2008. REUTERS/Chris Keane (UNITED STATES)
TARP recipient financial institution leaders testify before House Financial Services Committee on Capitol Hill in Washington, February 11, 2009. From left are, Goldman Sachs' Lloyd Blankfein, JPMorgan Chase's Jamie Dimon, Bank of New York's Robert Kelly, Bank of America's Ken Lewis,State Street's Ronald Logue, Morgan Stanley's John Mack, Citi's Vikram Pandit, and Wells Fargo's John Stumpf. REUTERS/Larry Downing (UNITED STATES)
Wells Fargo CEO John Stumpf testifies before a Senate Banking Committee hearing on the firm's sales practices on Capitol Hill in Washington, U.S., September 20, 2016. REUTERS/Gary Cameron TPX IMAGES OF THE DAY
WASHINGTON, DC - SEPTEMBER 20: John Stumpf, chairman and CEO of the Wells Fargo & Company, prepares for testimony before the Senate Banking, Housing and Urban Affairs Committee September 20, 2016 in Washington, DC. The committee heard testimony on the topic of 'An Examination of Wells Fargo's Unauthorized Accounts and the Regulatory Response.' (Photo by Win McNamee/Getty Images)
John Stumpf, chairman, president and chief executive officer of Wells Fargo & Co., speaks at the Bloomberg Year Ahead: 2014 conference in Chicago, Illinois, U.S., on Wednesday, Nov. 20, 2013. Stumpf said he dislikes Federal Reserve monthly bond purchases at this point in the economic cycle and that the policy has hurt savers. Photographer: Daniel Acker/Bloomberg via Getty Images
NEW YORK, NY - APRIL 30: Wells Fargo CEO John Stumpf (L) speaks with Wall Street Journal Editor in Chief Gerry Baker on FOX Business Networks' 'Opening Bell With Maria Bartiromo' at FOX Studios on April 30, 2015 in New York City. (Photo by Monica Schipper/Getty Images)
John Stumpf, chairman, president and chief executive officer of Wells Fargo & Co., speaks during an interview in Washington, D.C., U.S., on Thursday, May 7, 2015. Wells Fargo, the fourth-biggest U.S. bank by assets and the nation's leading home lender, in March left Stumpf's pay unchanged at $19.3 million after the firm generated a bigger profit than any other U.S. bank for a second straight year. Photographer: Andrew Harrer/Bloomberg via Getty Images
John Stumpf, chairman, president and chief executive officer of Wells Fargo & Co., listens to a question during an interview in Washington, D.C., U.S., on Thursday, May 7, 2015. Wells Fargo, the fourth-biggest U.S. bank by assets and the nation's leading home lender, in March left Stumpf's pay unchanged at $19.3 million after the firm generated a bigger profit than any other U.S. bank for a second straight year. Photographer: Andrew Harrer/Bloomberg via Getty Images
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Wells Fargo agreed to a settlement this month after it was disclosed that its employees created 2 million phony credit card and bank accounts for customers without their consent to boost sales figures and make more money. The bank fired 5,300 employees, but some members of Congress say Stumpf should also lose his job or face criminal charges.

Douglas Kass of Seabreeeze Partners Management wrote for The Street that Buffett called for "a radical transformation of the bank's ethics, in no uncertain terms."

But Buffett says he never went to the board.

Further, Buffett's office confirmed to Reuters that he talked with Stumpf just once after the scandal came to light. According to Buffett, the talk lasted only five minutes, where Buffett said Stumpf might be facing a larger problem than anticipated, and let him know that the fines levied against Wells Fargo were "not a metric to use in determining public reaction."

Buffett previously had said that he wouldn't make any comments on the Wells Fargo situation until November.

Click through for photos of Warren Buffett:

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Warren Buffett through the years
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Warren Buffett through the years
Investor Warren Buffett answers reporters' questions during a press conference to announce that Walt Disney will buy Capital Cities/ABC July 31.
Billionaire investor Warren Buffett of Omaha makes a rare public appearance during an autograph session outside Borsheim's Jewelry Store in Omaha, May 4. Buffett was signing autographs for shareholders in his company, Berkshire Hathaway, which is having its annual meeting May 5.
Billionaire businessman Warren Buffett sits with his wife Susan (R) and daughter Susie, prior to the annual Berkshire Hathaway shareholders meeting in Omaha, May 5. This marks a rare public appearance for the reclusive Buffett.
Arnold Schwarzenegger, Republican candidate for governor of California in the October 7, 2003 recall election listens as world famous investor, Warren Buffett (L), one of his financial advisors, speaks to reporters after a meeting of Schwarzenegger's Economic Recovery Council in Los Angeles August 20, 2003. REUTERS/Fred Prouser FSP
Billionaire financier Warren Buffett looks on after a meeting with U.S. Senator Arlen Specter (R-PA) and chairman of the Senate Judiciary Committee, at the Hart Senate Office Building on Capitol Hill in Washington June 29, 2005. Specter is the co-author of a bill seeking to create a $140 billion asbestos compensation fund. REUTERS/Shaun Heasley SH/TC
Billionaire Warren Buffett arrives at the Sun Valley Resort in Sun Valley, Idaho July 10, 2007. The world's biggest media chiefs gather this week at the 25th annual Allen & Co. conference at the resort starting today. REUTERS/Rick Wilking (UNITED STATES)
Warren Buffett, chairman and CEO of Berkshire Hathaway, speaks at a Senate Finance Committee hearing about "Federal Estate Tax: Uncertainty in Planning Under the Current Law" on Capitol Hill in Washington, November 14, 2007. Billionaire Buffett warned of widening U.S. income disparity and endorsed the estate tax as a check on wealth accumulation, while two senior lawmakers said they want the tax repealed. REUTERS/Jason Reed (UNITED STATES)
Billionaire financier and Berkshire Hathaway Chief Executive Warren Buffett greets shareholders during the Berkshire Hathaway Annual Shareholders meeting in Omaha, Nebraska May 3, 2008. REUTERS/Carlos Barria (UNITED STATES)
Billionaire investor Warren Buffett laughs as he appears with Microsoft Corporation founder Bill Gates for a town hall style meeting with business students broadcast by financial television network CNBC at Columbia University in New York, November 12, 2009. REUTERS/Mike Segar (UNITED STATES BUSINESS)
Berkshire Hathaway Chairman Warren Buffett kisses his ukulele at the Berkshire Hathaway annual meeting in Omaha May 1, 2010. Buffett played "I've Been Working on the Railroad." REUTERS/Rick Wilking (UNITED STATES - Tags: BUSINESS TRANSPORT)
Billionaire financier and Berkshire Hathaway Chief Executive Warren Buffett (L) and Microsoft founder Bill Gates gesture at the national launch ceremony for the BYD M6 vehicle in Beijing September 29, 2010. Chinese battery and car maker BYD, backed by Buffett, launched its first premium multi-purpose vehicle (MPV) in Beijing on Wednesday to tap rising demand in the world's biggest auto market. REUTERS/Jason Lee (CHINA - Tags: TRANSPORT BUSINESS)
Billionaire Warren Buffett, wearing a traditional tikka or a red mark on the forehead, speaks during a news conference in Bangalore March 22, 2011. Buffett on Tuesday said he is looking to invest in large countries like India, China and Brazil, but added that restrictions on foreign ownership in India's insurance industry could be a deterrent. Buffett also said and the U.S. economy was improving and that the devastating earthquake in Japan would not hurt global growth. REUTERS/Stringer (INDIA - Tags: BUSINESS)
Berkshire Hathaway Chairman Warren Buffett tours the floor of the New York Stock Exchange September 30, 2011. REUTERS/Brendan McDermid (UNITED STATES - Tags: BUSINESS)
Berkshire Hathaway chairman Warren Buffett holds his hand over his heart during the singing of the national anthem, at the start of a 5km race sponsored by Brooks Sports Inc., a Berkshire-owned company, in Omaha May 5, 2013, a day after the company's annual meeting. Buffett at the meeting on May 4, 2013 gave the most extensive comments to date about the future of Berkshire Hathaway Inc after he is gone, saying he still expects the conglomerate to be a partner of choice for distressed companies. REUTERS/Rick Wilking (UNITED STATES - Tags: BUSINESS SPORT ATHLETICS)
Warren Buffett, Chairman of the Board and CEO of Berkshire Hathaway, poses for a portrait in New York October 22, 2013. REUTERS/Carlo Allegri (UNITED STATES - Tags: BUSINESS)
Roberta Buffett Elliott sits with her brother Warren Buffett as they attend an announcement ceremony at Northwestern University in Evanston, Illinois, January 28, 2015. The sister of financial investor Warren Buffett has given Northwestern University more than $100 million to create the Roberta Buffett Institute for Global Studies, the largest single gift in the school's 164-year history, the university said on Wednesday. REUTERS/Jim Young (UNITED STATES - Tags: BUSINESS EDUCATION SOCIETY)
Warren Buffett, chairman and CEO of Berkshire Hathaway, speaks at the Fortune's Most Powerful Women's Summit in Washington October 13, 2015. REUTERS/Kevin Lamarque/File Photo
Warren Buffett, chairman and CEO of Berkshire Hathaway, smiles before speaking with Bill Gates (not pictured), at Columbia University in New York, U.S., January 27, 2017. REUTERS/Shannon Stapleton
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Stumpf did not give details, but said that he and Buffett talked about the scandal once when speaking Thursday at a House Financial Services Committee hearing. Stumpf also faced an onslaught from lawmakers at the hearing.

"Mr. Stumpf, I regrettably have a mortgage with your bank. I wish I didn't," Rep. Jeb Hensarling, R-Texas, said at the hearing. "If I was in a position to pay it off, I would, because you have broken my trust, and you have broken the trust of millions of others."

WFC stock is down 18.38 percent on the year. The company has lost more than $20 billion in market value since the scandal broke.

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