Chesapeake Energy discloses SEC investigation in filing - Beckley, Bluefield & Lewisburg News, Weather, Sports

Chesapeake Energy discloses SEC investigation in filing

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By Taylor Kuykendall, Reporter - bio | email

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In a recent filing with the Securities Exchange Commission, Chesapeake Energy disclosed a federal financial investigation into its CEO and business.

The investigation is related to the Founders Well Participation Program, an executive perk that allowed CEO Aubrey McClendon to take a financial interest in the wells drilled by Chesapeake. The program would allow McClendon to have up 2.5 percent interest in a well.

Additionally, the company was looking into McClendon's borrowing of more than $1 billion from EIG Global Energy Partners, a major partner with Chesapeake.

Last month, Chesapeake announced it had conducted an internal investigation of the practices the SEC is investigating and concluded there was no evidence of intentional wrongdoing.

On Friday, the company's 10-K disclosure revealed that an investigation initiated last May by the SEC is ongoing.

"On December 21, 2012, the SEC's Fort Worth Regional Office advised Chesapeake that its inquiry is continuing as an investigation, and it has issued subpoenas for information and testimony," the filing states. "The company, including Mr. McClendon, is providing information to the SEC in connection with this matter. The company is also responding to related inquiries from other governmental and regulatory agencies and self-regulatory organizations."

The board has already taken action to end the Founders Well Participation Program and Aubrey McClendon has agreed to step down as CEO on April 1. McClendon was one of the founders of Chesapeake.