Business tycoon and investor Warren Buffet has made some big decisions regarding his 31-year-old investment. Buffet’s Berkshire Hathaway has sold nearly all of its stake in Wells Fargo. With this, Buffett has abandoned his one of the most successful investments. However, things were not the same after the American multinational financial services company felled following scandals for mistreating customers. As per a regulatory filing, Berkshire owned around USD 26.4 million of shares in Wells Fargo as of March 31. This was nothing when compared to January 2018 when it had USD 32 billion of shares. Wells Fargo has been a staple of the conglomerate ever since it started investing in San Francisco-based bank in 1989. Berkshire spent at least USD 12.7 billion on its share and built a stake of around 10 percent.
The company said that it has sold 51.7 million shares or 99 percent of its remaining stake in Wells Fargo. This has reduced Berkshire’s holding in the bank to just USD 26.4 million. The reputation of Wells Fargo was shattered after the revelation that several employees opened millions of unwanted accounts just to meet the target. The fake accounts scandal first surfaced in the year 2016. The scandal was only about fake accounts. But it was also about charging unnecessary mortgage fees and forcing drivers to buy vehicle insurance that they did not require. This all started because of the bank’s strategy to sell more products per customer. Berkshire’s chief executive officer once said that the bank was slow to make things right.
Berkshire started reducing its stake in the bank in 2017 and it picked the pace in the last three years. Buffett has slashed holding in other banks in the past 12 months. He offloaded shares of Goldman Sachs. Meanwhile, he has invested in insurance broker Aon. Buffett has invested around USD 943 million to purchase about 4.1 million shares of Aon. Berkshire has been steadily increasing its bet on insurance brokerages. It has extended investment to Marsh & McLennan Cos. There are reports that Aon wants to create the world’s largest insurance brokerage by buying Willis Towers Watson Plc. It is awaiting regulatory approval and the deal would cost around USD 30 billion.
