Aubrey McClendon and Tom Ward, the founders of Chesapeake Energy Corporation (NYSE:CHK),were sued by investors who claim that the pair conspired to rig bids for drilling right during the Shale Boom. The Suit field July13 in federal court in Kansas City was brought forward by Chisholm Partners and its investors, claiming that Chesapeake and Ward had worked together to lower price artificially.
The suit comes only four months after a federal grand jury indicted McClendon on March 1st for allegedly fixing shale lease auction. Unfortunately, McClendon was involved in a fatal accident one day later, with his SUV slamming into a bridge in Oklahoma City, where he lives and works.
McClendon and Ward founded Chesapeake on 1989, though Ward left the company in 2006 and built SandRidge into a $10 billion firm, while McClendon grew the company to more than three times that size at its peak. The current suit accuses the two of collaborating to low the prices when Ward was chief executive officer at SandRidge Energy, and McClendon was the president at Chesapeake. The Plaintiffs are seeking at least $30 million in damages.
Before McClendon died, he maintained his innocence in the federal case. Ward in an interview with Bloomberg on March 29, declined to discuss any legal matters relating to McClendon though he noted that it had become common for thedrillerto work together sometime during the boom.
In other News, Chesapeake Energy stock was minus $2.96 million, an indication that investors used the strength in stock price to reduce their Holding. The total traded value was $14.8 million compared to $17.77 million on downticks. Even in block trades, money flow was negative $2.25 an indication of selling on the strength.
Chesapeake Energy Corporation (NYSE:CHK) has dropped 22.82% during the last three month. Year-to-Date the stock performance is at 2.22%. Shares of Chesapeake Energy rose by 10.05% in the last five trading days.