Offensive guild names

I just ran across this guy sitting in orgrimmar, and his guild is called <Removed for trolls>
It's a level 1 guild and theres only 1 person in there, but still... is this allowed?

I find this offensive as will other people and wanted to know how to report this, and if its worth reporting.. (will a GM actually take action on this?)

will the creator of the guild face any sort of penalty?