Did Wells Fargo Exec Party in Bank-Owned Malibu Beach House?

It sounds like an episode of "Bankers Behaving Badly." A senior Wells Fargo executive may have been living it up in a bank-owned multimillion-dollar oceanfront Malibu beach house. The house in question, the bank says, ended up in their hands in May 2009 when the former owners turned it over to Wells Fargo after reportedly losing a bundle in Bernie Madoff's massive fraud.

The uninvited houseguest, according to neighbors who blew the whistle on the situation, is reportedly Cheronda Guyton, a senior vice president in Wells Fargo's foreclosed commercial properties division.

In a statement provide to ABC News, a spokesperson for the bank would not confirm Guyton's role in the alleged incident, but said they "will conduct a thorough investigation of the allegations."

The statement also said that "Wells Fargo's Code of Ethics and Business Conduct handbook instructs team members to avoid conflicts of interest or the appearance of conflicts of interest in their personal and business activities."

This isn't the first time this year the billion-dollar San Francisco-based banking company finds itself mopping up a public relations mess. In fact, 2009 is shaping up as a corporate annus horribilis for Wells Fargo -- a banking behemoth which touts itself on its Web site as one of America's great companies.

In February, just months after receiving $25 billion from the U.S. Treasury as part of the TARP bailout plan, came news that the bank planned a lavish "employee recognition" event in Las Vegas. The all-expenses paid, multi-night extravaganza included rooms at two of the priciest hotels in Sin City -- the Wynn, Las Vegas and Encore, Las Vegas.

After Washington lawmakers and others publicly criticized bank executives for "spending taxpayer money to bankroll Las Vegas junkets," the trip was cancelled.

A few months later, in August, Wells Fargo announced that four of its most senior executives -- including CEO John Stumpf -- would be the recipients of huge boosts in pay. Stumpf's salary increased six-fold from $900,000 to more than $5 million. The company explained the increase was necessary to "pay ... senior people fairly" because TARP-funded banks are subject to limits on the amount of non-salary compensation executives can receive.

But Main Street seemed to take a dim view of boosting the take-home pay of senior banking executives while receiving a taxpayer funded bailout.

W. Michael Hoffman, executive director for the Center for Business Ethics at Bentley University in Waltham Mass., argued that the perception created by these problems can have a harmful effect on a bank like Wells Fargo. "I think the public is fed up with it when corporations continue to miss the big picture that their reputations are at stake here ... they risk people getting angry and pulling out their money or simply not doing business with them."

Hoffman added that an air of corporate entitlement is still prevalent at many large financial institutions. "I have consulted for many of these kinds of people over the years. Many of them have assumed a kind of air of privilege they feel they have worked hard and they have worked at this level and normal rules don't really apply to them."

Over the past few months, in addition to fighting for its reputation in the court of public opinion, Wells Fargo has also been battling allegations in several different courts of law.

Page
  • 1
  • |
  • 2
Join the Discussion
blog comments powered by Disqus
 
You Might Also Like...