(Reuters) - Berkshire Hathaway Inc has sold nearly all of its holdings in Wells Fargo & Co, as Warren Buffett abandoned a more than 31-year-old investment that had been among his most successful before the bank was felled by scandals for mistreating customers. In a regulatory filing on Monday, Berkshire said it owned just $26.4 million of shares in the fourth-largest U.S. bank as of March 31, down from around $32 billion in January 2018.Berkshire began investing in San Francisco-based Wells Fargo in 1989, and spent at least $12.7 billion on its shares, building a 10% stake.
The bank's reputation was shattered by revelations that employees facing aggressive sales goals opened millions of unwanted accounts, charged unnecessary mortgage fees and forced drivers to buy car insurance they did not need. The conduct grew out of Wells Fargo's longstanding strategy of selling more products per customer, or cross-selling. Buffett, who is Berkshire's chief executive, told CNBC in February 2020 that Wells Fargo had a "dumb" incentive system and was slow to make things right. "The big thing is they ignored it when they found out about it," he said. "You absolutely have to attack a problem as soon as it occurs, and you know about it. And if that had happened, Wells Fargo shareholders would be a lot better off."
Berkshire, based in Omaha, Nebraska, still owns shares of other banks, including $Bank of America Corp(BAC-N)$, its largest common stock holding other than Apple Inc.Wells Fargo paid $3 billion in February 2020 to settle criminal and civil probes.
Last November, the U.S. Securities and Exchange Commission charged two former top Wells Fargo executives with misleading investors about its financial results. Wells Fargo remains under a February 2018 Federal Reserve directive barring asset growth until it makes sufficient improvements.
Shares of Wells Fargo closed Monday up 94 cents at $47.90. Although the price has more than doubled since October, it is 28% below its January 2018 peak.