Warren Buffett Increases Stake in Wells Fargo (NYSE:WFC) Via Berkshire Hathaway (BRK:A) – Is it Ethical?

In its most recent regulatory filing, Berkshire Hathaway (BRK:A) increased its stake in Wells Fargo (NYSE:WFC) by over 10 million shares in the third quarter.

To me, this does raise ethical questions on the part of the actions and comments of Warren Buffett, who has been backing up the bailout of banking and other institutions on the one hand, while investing millions in one of those institutions, which has largely benefited from the use of taxpayer dollars.

Not only will those benefits help Buffett and Berkshire Hathaway short-term through their huge stake in Wells Fargo, but it will also, more significantly, help them over the long term as a small number of financial institutions emerge from the rubble of the bailouts and become more powerful and dominant in their industry; something Warren Buffett seeks and looks for to invest in when deciding on the best companies. This is well documented from hundreds of comments from Buffett in regard to that strategy through the years.

The reason I call attention to possible ethics issues is Buffett knows full well that every word he speaks is taken as financial gospel by not only his followers and adherents, but many of those that recognize him as an investing celebrity. So when he says we needed the bailouts, he was positioning himself in a way that was setting his holding company Berkshire Hathaway up for a profit. To say that Buffett would have been ignorant of this would be to deny his sharpness in evaluating and investing in companies throughout the decades. He knew it, and that’s troubling to me.

I’ve always respected Warren Buffett as an investor, and I believe he has helped hundreds of thousands of people build wealth through his particular system and way of investing. But his moving on to the public stage in a political manner in order to shore up the Obama administrations bailout efforts can’t be just looked upon as a personal political philosophy espoused by Buffett, as he lost that right a long time ago to make statements in that manner when he knows it’ll move the market.

So when Warren Buffett backed up the bailouts with his huge interest in Wells Fargo, he and others had to know that Berkshire Hathaway and Buffett would wildly profit from it. And he has.

The results of the more dominant market position of Wells Fargo after being bailed out by taxpayers will be positively felt for years to come; far beyond Buffett’s time on earth. Was it fair and ethical for Warren Buffett to spew out his support of bailouts and then wildly benefit from it. I don’t believe so.

While this doesn’t surprise me on the part of Buffett as to his political leanings, which can be found in his Berkshire Hathaway reports easily, it is disappointing to see him take advantage of publicly communicating that in order to build up the wealth of Berkshire Hathaway, his shareholders, and himself.