MALIBU, Calif.—Wells Fargo & Co. is vowing to take action against any employee who violates its policies after reports that a bank executive spent long weekends and partied at a foreclosed $12 million Malibu beach house.

The San Francisco bank says its rules prohibit employees from personally using properties held by the bank.

Neighbors tell the Los Angeles Times that Cheronda Guyton, a senior Wells Fargo vice president, moved into the house in May after its previous owners were financially devastated in Bernard Madoff's fraud scheme.

The beachfront home is in Malibu Colony, a dense stretch of luxury homes that has been a favorite of celebrities.

The bank says it is investigating all allegations regarding the 3,800-square-foot home.

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Information from: Los Angeles Times, http://www.latimes.com