Buffett's Deafening Silence on Wells Fargo

In 1991, after the wheels came off the bus at Salomon Brothers amid a bond-trading scandal, Warren Buffett traveled to Washington to testify before Congress.

Buffett's Berkshire Hathaway had become the biggest shareholder in Salomon four years earlier when the investment bank's chief, John Gutfreund, brought in the Omaha folk hero as an investor to stave off a takeover by Ron Perelman, as Carol J. Loomis detailed in Fortune years later. As the scandal around Salomon's flouting of Treasury auction rules swelled and threatened to bankrupt the company, Buffett had been drawn further into the firm to be its interim chairman.

In his opening remarks to a House committee, Buffett gave his philosophy on how to right the culture of the firm:

Almost 25 years to the day, a new scandal started rocking another bank that boasts Berkshire as its main shareholder: Wells Fargo. While the wheels haven't quite come off completely, it's safe to say the lug nuts loosened a bit after the Consumer Financial Protection Bureau announced it was fining the bank because employees ginned up 2 million fake accounts to meet sales quotas.

This scandal has nothing to do with losing money but everything to do with reputation. At first, the stock market seemed to shrug off the news. A $185 million fine? Please! That's a parking ticket when it comes to the legal bills of big banks. The shares actually rose on the day the settlement was announced.

But the scandal has reverberated beyond the small fine and the microscopic amount of money made for the bank by the fake accounts. Perhaps that's because many consumers live in an era when financial identity theft is -- or should be -- a top paranoia for everyone. That sets it apart from all of the disorderly conduct along the mortgage-bond assembly line during the financial crisis, crimes and misdemeanors that are perhaps more abstract to a Main Street audience.