SEC steps up its investigation of Chesapeake’s McClendon

By Laurie Bennett

March 2, 2013 at 6:51am

Federal regulators have formalized their investigation of Chesapeake Energy’s business dealings with its chief executive, billionaire Aubrey McClendon.

The Securities and Exchange Commission began an inquiry last May. In an annual report filed Friday, the company revealed that the SEC had issued subpoenas.

McClendon, who has agreed to step down as president and CEO by April 1, has profited from an arrangement that gives him with a share in every well drilled by the company.

Aubrey McClendon
Aubrey McClendon

Chesapeake faces several shareholder lawsuits for deals it has cut with McClendon. In addition to granting him a personal stake in company wells, the company purchased his personal map collection and co-sponsored his basketball team. Reuters reported in April that McClendon had borrowed more than $1 billion from one of Chesapeake’s business partners.

While the SEC has found sufficient cause to continue its probe of McClendon’s financial arrangements, the company itself has not. It stated in Friday’s filing that an internal review was “substantially completed.”

The company reported: “The review of the financing arrangements did not reveal any improper benefit to Mr. McClendon or increased cost to the Company as a result of the overlap in the financial relationships.”

In June, McClendon stepped down as chairman and two prominent politicians ended their terms as directors. Frank Keating, former Republican governor of Oklahoma, left after nine years on the board and Don Nickles, former Republican senator from Oklahoma, left after seven years.

Former ConocoPhillips Chairman Archie Dunham was named the new chairman.

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  • #1.   Greg 03.02.2013

    Stink - greed ruins lives, the country.

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