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Chesapeake Highly Volatile As Ex-CEO Indicted For Conspiracy

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Shares of Chesapeake Energy Corporation (NYSE: CHK) opened for trading on Wednesday at $2.62 after closing the prior day at $2.76. The stock quickly shot to an intra-morning high of $2.87 - up nearly 4 percent on the day.

The U.S. Justice Department charged Aubrey McClendon, the former head of Chesapeake Energy, for orchestrated a conspiracy in which two oil and gas companies colluded not to bid against each other for the purchase of various leases in Oklahoma from 2007 to early 2012.

McClendon was forced to step down from the head of Chesapeake Energy in 2013.

The indictment was filed in the U.S. District Court for the Western District of Oklahoma on Tuesday. The executive could face a maximum penalty of 10 years in prison and a $1 million fine.

"While serving as CEO of a major oil and gas company, the defendant formed and led a conspiracy to suppress prices paid to leaseholders in northwest Oklahoma," said Assistant Attorney General Bill Baer of the Justice Department's Antitrust Division. "His actions put company profits ahead of the interests of leaseholders entitled to competitive bids for oil and gas rights on their land. Executives who abuse their positions as leaders of major corporations to organize criminal activity must be held accountable for their actions."

 

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Posted-In: Aubrey McClendon chesapeake energy US Department of JusticeNews Legal