Reports that a Wells Fargo & Co executive used a bank-owned, beachfront Malibu home as her own private party pad reignited outrage over unbridled excesses at firms that received U.S. bailouts.
Some neighbors in the super-exclusive Southern California enclave told the Los Angeles Times on Friday that Cheronda Guyton, a Wells Fargo senior vice president responsible for foreclosed commercial properties, spent weekends in the multi-million home at No. 106 Malibu Colony hosting eye-catching gatherings.
Malibu Mayor Andy Stern told Reuters on Saturday that he never got complaints about parties at the 3,800 square-foot house, which was returned to the bank after its owners, Lawrence and Linda Elins, reportedly lost a fortune to Bernie Madoff's massive Ponzi scheme.
Another resident in the exclusive enclave told Reuters on Sunday that Guyton did have parties, but said they weren't excessive.
I can see how it would happen, how someone would fall into that trap. This is a very enticing place, said the resident, who asked not to be identified.
It's shocking what she did. I really question her judgment. How many other bank executives would make a decision like that? And it makes you wonder whether it isn't a bigger systemic issue in banking and Wall Street and the economy.
The Malibu Colony resident estimates the house was worth around $18 million prior to the collapse of the real estate market.
Wells Fargo, which received a $25 billion bailout from the U.S. government, said in a statement on Friday it took possession of the Los Angeles-area property in May and withheld it from the market for an agreed-upon period of time, adding that company policy prohibits personal use of properties held by the bank.
Efforts to contact Guyton for comment were not successful.
Blogs about the executive's use of the house garnered dozens of angry comments, which included calls for Guyton's ouster, and a consumer boycott of the bank.
The Los Angeles Times reported that the home was valued at $12 million when ownership was transferred to the bank.
The mayor, who is also a real estate agent, called the home the most impressive he has seen in the gated community that counts celebrities like actor Tom Hanks among its residents.
It's a very special house, with lots and lots of glass, great views in a great part of the beach, said Stern, who added that the property could fetch as much as $150,000 a month as a summer rental.