Ohio AG probing Chesapeake, could join class action
COLUMBUS, Ohio (Legal Newsline) - Ohio Attorney General Mike DeWine has initiated an investigation into Chesapeake Energy to see if state public pension funds have been defrauded.
DeWine disclosed in a June 12 letter to Ohio Citizen Action that his office began its probe in April to review allegations that former CEO Aubrey McClendon used the company to benefit his personal interests.
McClendon announced he was stepping down in May while the company's stock struggled.
"If these allegations are true, Chesapeake shareholders, which include the Ohio retirement systems, may have suffered a loss to the value of their Chesapeake shares," DeWine wrote.
DeWine says the State could join a lawsuit in Oklahoma federal court if it is approved as a class action.
According to The Associated Press, a report shows McClendon secured up to $1.1 billion in personal loans, including loans from a firm that does business with Chesapeake.
Ohio Citizen Action executive director Sandy Buchanan wrote DeWine earlier in June.
"A decade ago, the Enron scandal saw a $65 billion company's management integrity and finances collapse in what was then the second largest bankruptcy in history," she wrote.
"Investors, employees and electric consumers were left holding the bag. A string of similar scandals and bankruptcies followed: Global Crossing, Worldcom, Qwest, Arthur Andersen, and Tyco.
"Now Chesapeake Energy is following in Enron's footsteps. I am writing to urge you to step in to protect Ohioans from this company."