Wednesday, May 2, 2012

Shocker: Inside Chesapeake, CEO Ran $200 Million Hedge Fund




As chairman and CEO of Chesapeake Energy, Aubrey McClendon has been a powerhouse in the vast U.S. natural gas market, directing the company's multibillion dollar energy-trading operation and setting output targets for America's second-largest producer.   Behind the scenes, a Reuters investigation has found, McClendon also ran a lucrative business on the side: a $200 million hedge fund that traded in the same commodities Chesapeake produces.

On Tuesday, two weeks after Reuters reported that McClendon has taken up to $1.1 billion in loans against his stakes in Chesapeake oil and gas wells, the company stripped McClendon of the chairmanship and reiterated that it's reviewing details of the loans. A statement quoted McClendon, who will stay on as CEO, saying that the move will enable him to focus his "full time and attention on execution of the company's strategy."

But for at least four years, from 2004 to 2008, McClendon's attention extended well beyond his job at Chesapeake.  During that time, said a veteran trader who helped run McClendon's private hedge fund   , the Chesapeake executive engaged in "near daily" communications and "exhaustive" calls to help direct the fund's trading….

Read all about it at http://www.cnbc.com/id/47261565

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