Exclusive: Chesapeake CEO McClendon hires ex-SEC lawyer

Tue Jun 5, 2012 4:53pm EDT
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By Sarah N. Lynch and Aruna Viswanatha

WASHINGTON (Reuters) - The embattled chief executive of Chesapeake Energy Corp. has hired a top defense lawyer to represent him in a securities regulatory inquiry into $1.3 billion in personal loans, three people familiar with the situation said.

CEO Aubrey McClendon has retained Marvin Pickholz, a partner with Duane Morris and a former assistant director of enforcement with the U.S. Securities and Exchange Commission. He is counseling McClendon in connection with the SEC inquiry into loans he obtained from an investment firm doing business with the natural gas company.

The SEC is looking into whether the loans posed a conflict of interest or should have been disclosed to shareholders.

The loans from investment funds managed by EIG Global Energy Partners enabled McClendon to participate in a special perk which awarded him as much as a 2.5 percent interest in every well drilled by Oklahoma City-based Chesapeake each year.

McClendon used the well stakes as collateral for the loans.

The SEC launched its inquiry soon after April 18, when Reuters reported on the loans to McClendon, who co-founded Chesapeake more than two decades ago.

Pickholz, an aggressive and tough-talking attorney, represented a key prosecution witness in the trial of homemaking doyenne Martha Stewart on obstruction of justice charges stemming from an insider trading investigation. He is also a frequent legal commentator on television news programs.

Pickholz, who also wrote a book on securities crimes published by Thomson Reuters' WestLaw division, declined to comment for this article.   Continued...

Chief Executive Officer, Chairman, and Co-founder of Chesapeake Energy Corporation Aubrey McClendon walks through the French Quarter in New Orleans, Louisiana March 26, 2012. REUTERS/Sean Gardner