(Reuters) - Warren Buffett's Berkshire Hathaway Inc BRKa.N withdrew its application to the Federal Reserve to boost its ownership stake in Wells Fargo & Co WFC.N above 10 percent, and is instead selling 9 million shares to keep it below that threshold.

A Wells Fargo branch is seen in the Chicago suburb of Evanston, Illinois, U.S. on February 10, 2015. REUTERS/Jim Young/File Photo

Berkshire on Wednesday said it concluded after several months of talks with Fed officials that maintaining the higher stake would “materially restrict” its ability to do business with the third-largest U.S. bank.

The Fed exerts special oversight when investors take large bank stakes. It often allows double-digit stakes not designed to exert a “controlling influence,” but has said it would review any resulting business relationship “case-by-case.”

Berkshire said “investment or valuation considerations” were not factors in its sale of 7.13 million Wells Fargo shares this week, and planned sale of another 1.87 million shares “in the near future.”

The company, which has owned Wells Fargo stock since 1989, also said it will sell more Wells Fargo shares if needed to keep its stake “slightly below 10 percent,” including if the bank repurchases its own stock.

According to a regulatory filing, Berkshire owned 504.3 million Wells Fargo shares worth more than $27 billion before the sales, making it the bank’s largest shareholder. Buffett, 86, owned another 2.01 million of the bank’s shares personally.

Wells Fargo has been beset since September by a scandal over its creation of unauthorized customer accounts.

“We appreciate the confidence that Berkshire Hathaway has placed in Wells Fargo over the years, both as our largest shareholder and a very valued customer,” spokesman Mark Folk said in a statement. “We look forward to continuing our relationship.”

On Monday, Wells Fargo said it would claw back an additional $75 million of compensation from the executives it blamed most for the accounts scandal, former Chief Executive John Stumpf and former community banking chief Carrie Tolstedt.

The San Francisco-based lender’s shares have nonetheless risen 16.6 percent since Donald Trump was elected U.S. president, though they now trade at their lowest level in four months.

Many other banks’ shares also rose after Trump’s election.

Buffett told CNBC television on Feb. 27 that Wells Fargo made a “huge mistake” by not immediately addressing the unauthorized accounts, and that letting the problem mushroom made its reputation suffer.

Wells Fargo is expected on Thursday to report a decline in first-quarter profit, according to analysts polled by Thomson Reuters I/B/E/S.

Berkshire has large investments in other financial services companies, including year-end stakes of 16.8 percent in American Express Co AXP.N, 6 percent in U.S. Bancorp USB.N and 2.9 percent in Goldman Sachs Group Inc GS.N.

The Omaha, Nebraska-based conglomerate also operates more than 90 businesses including insurers, utilities, industrial products makers, food and apparel companies, and a railroad.