Banking Law

When I read this story from The Los Angeles Times late last week, I thought to myself that there has to be a limit to how tone deaf a person can be to public sentiment and still keep his or her job. Wells Fargo takes a deed to a $12 million Malibu beach house owned by victims of Bernie Madoff's Ponzi scheme who conveyed it to the bank to satisfy a debt and the next thing the neighbors know, wild wing-dings are being thrown at the beach pad by none other than Wells Fargo's head of commercial real estate. I mean, let's turn aside from the appearance of impropriety argument and just concentrate on the public relations disaster-in-the-making. How dumb can you be? Did you really think that no one would notice and, even if they did, they'd give you a pass? Really?

Colony residents said the woman they believe to be [Wells Fargo Senior Vice President Cheronda] Guyton, along with her husband and two children, took up occupancy in home No. 106 in Malibu Colony shortly after Lawrence Elins turned it over to Wells Fargo Bank on May 13.

The residents said the family spent long weekends at the home and had guests over, including a large party the last weekend of August that featured a waterborne arrival.

"A yacht pulled up offshore, with one of those inflatable dinghies to take people back and forth to the shore," said Roman's wife, Elaine Johnson. "About 20 people got taken over in the dinghy."

Way to fly in under the radar, Cheronda.

In a prepared statement, the bank said it would investigate the matter thoroughly and that an employee's use of property that had been surrendered by a borrower to satisfy a debt to the bank would be a violation of the bank's code of ethics. I know what you cynics are thinking: The term "bank's code of ethics" is an oxymoron. That may be so, but violating it can still get you in hot water. As Ms. Guyton discovered, post-haste.

On Monday, Wells Fargo & Co. said it terminated an employee for misconduct at a bank-owned property in one of California's most well known celebrity enclaves.

Cheronda Guyton, senior vice president in charge of commercial foreclosed properties, had been seen using the property to host weekend guests and throw private parties, according to published reports.

[...]

Wells Fargo said an internal investigation into the matter had found that "a single team member was responsible for violating our company policies" and that "employment of this individual has been terminated."

"We deeply regret the activities that have taken place as they do not reflect the conduct we expect of our team members," Wells Fargo said.

I'll bet they regret those activities. Think of all the time, effort, and expense that Wells Fargo pours into its branding, public relations, and advertising, all of it is designed to build trust with the public, particularly consumers for a bank with the focus of Wells Fargo. Along comes one employee with a tin ear and the whole effort comes a cropper. At least you can't accuse Wells Fargo of dilly-dallying about taking action. The story hits the press on Friday and by Monday the subject of the story is gone. Of course, it will take a while for the bad smell she left behind to dissipate, so the bank will have some fond memories of her to cherish as her yacht's wake disappears over the banking horizon.

On the other hand, in this day and age, you can rest assured that some other numbskull associated with some other financial institution will soon pull an equally bone-headed PR move and take the heat off Wells Fargo. It's darn near inevitable.