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Business

Warren Buffett loses a billion as Wells Fargo scandal grows

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Opening sequence

Business

Warren Buffett loses a billion as Wells Fargo scandal grows

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COMING UP:Warren Buffett loses a billion as Wells Fargo scandal grows

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Transcript

00:00:01
>> Billionaire investor, Warren Buffett, is missing more than a billion dollars and he knows where it went. That's how much value has disappeared from one of his biggest investments, Wells Fargo, in the days after a scandal erupted at the bank. Regulators discovered employees opened more than 2 million bogus bank and credit card accounts in order to meet internal sales goals.
00:00:23
And the bank knew about it as far back as 2011. Buffett, Wells Fargo's biggest shareholder through his company Berkshire Hathaway, isn't talking, but that didn't stop Reuters banking correspondent Dan Freed from asking.>> I got him on the phone. He shut me down immediately. He has no interest in talking about this at this point.
00:00:44
You can be sure that Buffett is deeply unhappy about this. This is costing him a fortune and who knows when the bank will recover its reputation.>> Wells Fargo's image severely tarnished by normal banking practice gone wrong. Every bank engages in cross-selling, that's when you try to get existing customers to add on new products.
00:01:08
But Wells Fargo took it to a whole different level.>> Well I don't think I have spoken to anyone who doesn't think that it's a very, very serious matter and a massive embarrassment for the company, and people are really just dumbfounded.>> Investors, analysts, and former regulators also taking Wells Fargo's management to task for not shouldering more of the blame, for clearly not having a handle on the situation, and for allowing the former head of Community Banking to walk away with $125 million retirement package in July.
00:01:41
Critics are asking for some or all of that back, and there's more to come. The Feds are opening an investigation, and next week, CEO Jonathan Stumpf will be in Washington to answer questions before a Senate panel, which includes his industry's toughest critic, Senator Elizabeth Warren.