natural gas production, Chesapeake holds tremendous sway over

200 million hedge fund

Canada Goose sale natural gas market, directing the company multibillion dollar canada goose uk outlet energy trading operation and setting output targets for America second largest producer.

buy canada goose jacket cheap Behind the scenes, a Reuters investigation has found, McClendon also ran a lucrative business on the Canada Goose sale side: a $200 million hedge fund that traded in the same commodities Chesapeake produces.

canada goose deals On Tuesday, two weeks after canada goose uk black friday 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 reviewing details of the loans. A statement quoted McClendon, who canadian goose jacket will stay on as CEO, saying that the move will enable him to focus his time and attention on execution of the company strategy.

canada goose coats But for at least four years, from 2004 to 2008, Canada Goose Outlet McClendon attention extended well beyond his job at Chesapeake.

During that time, said a veteran trader who helped run McClendon private hedge fund, the Chesapeake executive Canada Goose Parka engaged in daily communications and calls to help direct the fund trading.

Canada Goose online The buy canada goose jacket cheap fund, Heritage Management Company LLC, was started by McClendon and Chesapeake co founder Tom Ward. The hedge fund listed Chesapeake headquarters in Oklahoma City as its mailing address, documents uk canada goose outlet show. Heritage staff included an accountant who was simultaneously employed by Chesapeake. The fund also earned McClendon and Ward management fees and a cut of profits from cheap canada goose uk outside investors.

Canada Goose Outlet There is Canada Goose online no evidence that McClendon or Ward used inside knowledge gleaned from Chesapeake in their hedge fund trading. Neither the company nor McClendon would comment, and Ward said he saw nothing wrong with the arrangement.

canada goose clearance But experts on canada goose coats on sale energy trading, corporate governance and commodity market regulation said they were stunned by the latest revelation. oil major Texaco. trading in the commodity around which the cheap Canada Goose CEO business is based would be a clear no. We would never have tolerated that, ever.

canada goose black friday sale Thomas Mulholland, a risk management consultant to oil and gas producers for Golden Energy Services in St Louis, said such matters are very seriously by energy companies, and there are strict codes against canada goose it. Even if there is just a whiff of impropriety, he said, can be enough to lead to a termination.

buy canada goose jacket The commodities markets are less regulated than equity markets, where corporate executives are prohibited from trading stock in their own companies based on undisclosed financial information. In commodities markets, insider trading isn illegal unless price manipulation can be proven.

canada goose Nonetheless, personal dealing in energy markets is typically canada goose clearance sale forbidden by oil and gas companies for a variety of reasons.

In Chesapeake case, McClendon would have been aware of major decisions that could affect natural gas prices before that information became public. natural gas production, Chesapeake holds tremendous sway over markets. On January 23, the company announced sharp output curbs in uk canada goose response Canada Goose Jackets to low prices. natural canada goose factory sale gas futures surged by 8 percent the same day. regulator, the Commodity Futures Trading Commission, and now professor of finance at Syracuse University.

canada goose store Another potential problem is known as That when a trader buys or sells a commodity in advance of a client or his Canada Goose Online company orders. In theory, McClendon first hand knowledge of Chesapeake own plans to trade would enable him to profit by trading ahead of Chesapeake a move that could raise costs for the company.

cheap Canada Goose knowledge of Chesapeake activities could be perceived as having insight into the movement of commodities prices, which certainly raises conflict of interest issues as well as ethical issues about the ability to enrich himself on non public information, said Tim Rezvan, oil and gas industry analyst at Sterne Agee in New York.

correct, Rezvan said, disclosures would be even more alarming than the personal loans.

canada goose clearance sale A securities law professor said canada goose uk shop the very existence of the hedge fund could prompt a securities investigation.

would argue, and I canada goose black friday sale think the SEC would argue, that the failure to disclose that you are engaging in this kind of conduct can constitute a securities fraud problem, said Elizabeth Nowicki, a canada goose clearance professor at Tulane University. She said a failure by McClendon and Ward to disclose their fund to Chesapeake shareholders may constitute a omission that could draw SEC scrutiny.

reasonable investor would want buy canada goose jacket to know that the CEO could be in a situation where he betting against the interests of the company personally, Nowicki said.

Canada Goose Jackets UNANSWERED QUESTIONS It remains unclear whether McClendon received permission from Chesapeake board to run a hedge fund and actively trade in the commodities markets for himself, or whether his trading continues. Chesapeake and McClendon personal spokesman declined to comment.

Chesapeake also declined to say whether employees would be prohibited from operating such a hedge fund or trading their own cash in oil and gas markets. The issue isn clearly addressed in a code of ethics published on Chesapeake website.

Canada Goose Parka Two Chesapeake board members contacted by Reuters declined comment. canada goose coats litigation, we are constrained in what we can say, said Chesapeake spokesman Michael Kehs, who was referring to Canada Goose Coats On Sale shareholder lawsuits filed in the wake of the Reuters report canada goose store on McClendon personal loans.

canada goose coats on sale Oil and gas markets are secretive, and trading positions are almost never made public. McClendon hedge fund partner Ward said the two were always careful not to let Chesapeake decisions influence the hedge fund endeavors.

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