Correction Appended December 5th
When Forbes called Chesapeake Energy CEO Aubrey McClendon “the world’s most reckless billionaire,” it was referring to his penchant for expanding the natural gas business with massive debt-fueled purchases. But in 2012, a series of stories emerged that suggested McClendon was reckless when it came to commingling his personal finances and those of the publicly traded firm he managed. According to several reports in Reuters, McClendon was compensated by his board with the opportunity to purchase stakes in some of Chesapeake’s gas wells, and then borrowed against those stakes without disclosing to shareholders the nature of these transactions. The Reuters reports also revealed that he ran a hedge fund from 2004 to 2008 that traded in natural gas while being privy to sensitive, private information about the market, and that in 2010 he had Chesapeake employees complete $3 million worth of personal work, some of which came in the form of repairs to his personal residence. (Chesapeake says this money covered accounting and other services included in his employment agreement and were fully reimbursed by McClendon) McClendon has since been removed as chairman of the firm, but he remains in place as CEO while facing several shareholder lawsuits and investigations into possible securities fraud, though he and the company deny any wrongdoing.
This post was updated to clarify the nature of McClendon’s compensation; McClendon was given the opportunity to purchase stakes in company wells, but was not directly compensated with those stakes, and the company claims McClendon has reimbursed it for work done on his home.