LOS ANGELES: Wells Fargo said the company was investigating allegations an employee held a series of parties in a Malibu mansion seized by the bank from a couple swindled in the Bernard Madoff fraud.

The Los Angeles Times reported that a senior vice president responsible for foreclosed properties, identified as Cheronda Guyton, used the 12-million-dollar home during the summer after it was taken over by the bank.

The mansion had been turned over to the bank in May after its previous owners suffered massive losses in Madoff's multi-billion-dollar Ponzi scam.

The Times reported that local residents had seen Guyton spending several weekends at the property during the summer, including one evening when guests arrived for a party from an offshore yacht.

The Wells Fargo statement did not identify Guyton but warned that "decisive action" would be taken against any employee found to have breached policies which forbid personal use of properties held by the bank.

"We are thoroughly investigating this situation and will take decisive action with respect to any team member who may have violated Wells Fargo?s policies," the company said in a statement.

"The allegations certainly do not reflect the conduct we expect of our team members ... We regret the disruption to the neighboring property owners since these allegations were made."