Warren Buffett to back Wells Fargo board despite scandals

Warren Buffett is likely backing the board of Wells Fargo — despite criticisms of its poor oversight during the bank’s fake-accounts scandal.

As Wells Fargo’s largest investor, Buffett has likely already voted his shares to support the bank’s recommendations at its contentious annual shareholder meeting next week, a rep told Reuters on Wednesday.

Those include reinstating most of the board’s directors, including Chairman Stephen Sanger.

The Omaha billionaire’s conglomerate, Berkshire Hathaway, owns nearly 10 percent of Wells Fargo and Buffett personally owns shares as well. Many investors follow Buffett’s lead because of his decades-long track record of profitable investments.

Wells Fargo, the fourth-largest US bank, has for months been embroiled in a scandal that involves thousands of former employees creating as many as 2 million accounts in customers’ names without their permission.

The matter has already subsumed former Chief Executive John Stumpf, who resigned in October. Now the board, whose members include new CEO Tim Sloan, is facing opposition in the shareholder vote next week after proxy advisers recommended rejecting many of them.

Buffett’s assistant, Debbie Bosanek, told Reuters that Buffett supports management and the board, and that he has likely voted shares held by him and Berkshire to reflect that view.

Berkshire held nearly 10 percent of Wells Fargo’s outstanding shares as of year-end, but has decided to sell some to avoid breaching the 10 percent threshold that would require special regulatory permission.

Sloan recently told the Wall Street Journal that Buffett would support the board, but Buffett had not confirmed Sloan’s statement until now.