Warren Buffett “simply blew it” regarding Berkshire Hathaway’s investment in Wells Fargo because he wasn’t watching the company closely, according to banking analyst Dick Bove.
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“The people he had entrusted to give him information on this company were not looking at it closely, and therefore some egregious errors were being made on a constant basis, and they never caught them,” Bove told FOX Business’ Liz Claman on Friday.
Buffett’s Bershire Hathaway is Wells Fargo biggest shareholder with a 9.4% stake followed by Vanguard at 6.41% and State Street with a 4.14% stake, according to FactSet.
The Consumer Financial Protection Bureau and the Office of the Comptroller of the Currency slapped Wells Fargo on Friday with a $1 billion fine as punishment for misconduct at its mortgage and auto lending business.
“There was a breakdown in the culture of the company internally, and that breakdown was due to the fact that it was pushing so hard to increase sales,” Bove said.
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Since the scandal broke in September 2016, Wells Fargo’s stock is up 5% after fluctuations.
Bove, a strategist at Hilton Capital, credits Wells Fargo CEO Tim Sloan for the “miraculous” performance of the company’s stock and stepping in at a time where the company was in agony.
“It’s going in the right direction,” he said during “Countdown to the Closing Bell” interview. “I really think that is going to be a very successful company for decades to come.”
