Wells Fargo & Co. (WFC) shares were indicated higher in premarket trading Monday after legendary investor Warren Buffett criticised the bank and its former CEO for reacting too slowly to last year's bogus-accounts scandal.
Buffet, who's Berkshire Hathaway Inc. (BRK.A) is Wells Fargo's biggest shareholder with a 10% holding worth around $27 billion, said management had encouraged the "wrong type of behaviour" that ultimate led to employees opening fake accounts in order to earning performance bonuses.
"The main problem was they didn't act when they learned about it," Buffet told reporters at his annual shareholder meeting this weekend in Omaha. "They were totally wrong on that."
The scandal claimed former CEO John Strumpf, who resigned last year, and led to what the bank has described as "decisive actions" to "make things right for our customers."
Wells Fargo shares were expected to open around 0.18% higher at the opening bell, based on premarket trading, and were priced to start the session at $55.21 each.
However, RealMoney's technical expert, Bruce Kamich, cautioned last week that the stock isn't showing good relative strength versus the Financial Select Sector SPDR (XLF) benchmark and that it might not be time to ride the stock just yet.
http://realmoney.thestreet.com/articles/05/04/2017/dont-climb-aboard-wells-fargo-right-now
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