Chesapeake under investigation by SEC

Chesapeake Energy Corp. acknowledged Friday that it had been subpoenaed by the U.S. Securities and Exchange Commission and other authorities related to allegations of conflicts of interest and collusion.

The nation’s second-largest natural gas producer after Exxon Mobil Corp. said last week it was cooperating with authorities and that an internal investigation into the conduct of CEO Aubrey McClendon showed no intentional wrongdoing had taken place.

McClendon announced in January he would leave the company, citing “philosophical differences” with a new board of directors that had installed by shareholders following the allegations.

Chesapeake said its legal costs had jumped in 2012, in part because of the investigations.

Although Chesapeake said last week that it believed the evidence in the investigations would show no improper activity had occurred, the Oklahoma City-based company acknowledged in filings the possibility of guilt.

“The Company cannot predict the outcome or impact of these pending matters, but the lawsuits could result in judgments against the Company and directors and officers named as defendants and there could be one or more enforcement actions in respect of the governmental investigations,” Chesapeake said in the SEC filing. “For example, we could be exposed to enforcement or other actions with respect to the continuing SEC investigation into certain disclosure, accounting and financial reporting matters.”

Chesapeake also detailed how the investigations had affected the company financially.

“Our legal expenses increased in 2012 compared to 2011 due primarily to defending the shareholder lawsuits, responding to governmental investigations and inquiries, and conducting the board’s review of certain matters involving our Chief Executive Officer, and such expenses in the future may be significant,” the company said. “In addition, attention to these matters by members of our senior management has been required, reducing the time they have available to devote to managing the company’s business.”

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Read ongoing FuelFix coverage of Chesapeake’s troubles:

Steffy: Chesapeake CEO leaves mixed legacy (Feb. 1)
Chesapeake shares surge after CEO’s resignation (Jan. 30)
Chesapeake chief quits, cites ‘philosophical differences’ (Jan. 29)
Contractor accuses embattled Chesapeake of skirting bills (Jan. 28)
Chesapeake board to change salaries, structure (Jan. 7)
Chesapeake declares dividend, despite cost-saving (Dec. 17)
Chesapeake offers its workers ‘voluntary separation’ (Dec. 14)
Analysts encouraged by Chesapeake’s new chairman (June 22)