Berkshire Hathaway (BRK.A) CEO Warren Buffett said in an interview with Fox Business that he wants to wait until after the presidential election to discuss Wells Fargo's (WFC) recent fake account scandal.
Buffett said he is concerned discussing the scandal now could "lead down too many paths" before the election, although many business leaders have been awaiting Buffett's comments on the subject.
Wells Fargo has received intense scrutiny, including a Senate hearing, over the scandal. Senators questioned CEO John Stumpf over a widespread scheme in which thousands of employees created over 2 million fake accounts in customers' names to reach productivity targets set by the bank's management.
Berkshire Hathaway has a sizable investment in Wells Fargo, owning 500 million shares worth over $22 billion. Buffett began buying shares in the bank during the 2007-2008 crisis and has added to his position over the last eight years. That accounts for nearly 10% of the bank.
Warren Buffett has purchased several banks since the financial crisis, but its Wells Fargo position is much larger than its ownership in other financial firms. Currently, Berkshire has positions in several banks including Bank of New York Mellon (BK), worth $843 million, Goldman Sachs (GS), worth $1.8 billion, M&T Bank (MTB), worth $622 million and U.S. Bancorp (USB), worth $3.6 billion.
Berkshire's position in Wells Fargo is 6% of the investment firm's total market capitalization. While potential fines may have little impact on Berkshire's overall investment income, the scandal may embolden Buffett to take a more active role in Wells Fargo.
Buffett has a history of actively shaking up management in the face of unethical business practices. When Salomon Brothers was caught submitting false information about its Treasury bond trading activity in 1991, Buffett took over the company, became its CEO and fired several executives at the firm.
"Lose money for my firm and I will be understanding; lose a shred of reputation for the firm, and I will be ruthless," Warren Buffett famously said in a testimony before Congress. (Buffett's full statement has been published by The Wall Street Journal.)