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Chesapeake CEO Ran $200M Hedge Fund on the Side
YOUNGSTOWN, Ohio -- The Reuters news service today published another special report questioning the actions and possible conflicts of interest involving the CEO of Chesapeake Energy Corp., Aubrey McClendon. According to the news story (CLICK HERE TO READ).
The story says the Heritage Management Company LLC was established by McClendon and Chesapeake co-founder Tom Ward, and listed Chesapeake's Oklahoma City address as its headquarters.
"Heritage's staff included an accountant who was simultaneously employed by Chesapeake. The fund also earned McClendon and Ward management fees and a cut of profits from outside investors," Reuters reported.
"There is no evidence that McClendon or Ward used inside knowledge gleaned from Chesapeake in their hedge fund trading. Neither the company nor McClendon would comment, and Ward said he saw nothing wrong with the arrangement. But experts on energy trading, corporate governance and commodity-market regulation said they were stunned by the latest revelation."
The story comes on day after McClendon agreed to relinquish his title as chairman of Cheseapeake Energy Corp., but remain as CEO. His ouster as chairman follows weeks of negative news stories, first reported by Reuters, about his stewardship of Chesapeake in relation to his personal holdings.
Speaking to analysts this morning during a conference call, McClendon said, "There's been enormous and unprecedented scrutiny of our company, and of me personally. And a great deal of misinformation has been published, and uncertainty created."
Yesterday Chesapeake reported a first-quarter net loss to shareholders of $71 million, or $0.11 a share, on revenues of $2.4 billion. The results include a $167 million non-cash loss resulting from the company's natural gas, liquids and interest rate hedging programs.
READ REUTERS STORY:
Special Report: Inside Chesapeake, CEO ran $200 million hedge fund