Chesapeake Energy Confirms SEC Probe

By Alex Cameron, Oklahoma Impact Team

OKLAHOMA CITY -- Chesapeake Energy confirmed Thursday afternoon reports that the Securities and Exchange Commission (SEC) has launched an informal inquiry involving the company and its CEO, Aubrey McClendon. 

Although the company's news release does not specify the subject or purpose of the inquiry, numerous published reports make clear the agency is examining personal loans taken out by McClendon to finance his stake in thousands of Chesapeake wells. 

The loans were reportedly made, in large part, by a company (EIG Global Energy Partners) that was also doing business with Chesapeake.

While the release refers to the inquiry as "informal," the Oklahoma Impact Team has learned that should not be construed to mean that the investigation isn't serious. 

Sources explain that "formal orders of investigation" are generally required only when SEC enforcement staff must resort to filing subpoenas in order to obtain desired documents.  In many cases, the power of a subpoena may not be necessary for investigators to see what they want to see. 

Today's release indicates the SEC has requested access to certain documents, and Chesapeake says it and McClendon are fully cooperating with the agency. 

In addition to the SEC probe, Chesapeake's Board of Directors is reviewing McClendon's financing arrangements with respect to the well program, claiming that they had only been made "generally aware" of them prior to their disclosure in the media. 

Earlier this week, the Board announced it would be replacing McClendon as Chairman with an independent, non-executive leader.

The IRS is also investigating the matter.  Chesapeake officials say the agency is taking a closer look at the Founder Well Participation Program as part of its audits of the company's 2008 and 2009 tax filings.