Oklahoma City-based Chesapeake Energy Corporation is the target of two separate legal actions filed in October, according to a quarterly report filed with the U.S. Securities and Exchange Commission on Friday.
In the company’s Form 10-Q filed on November 3, Chesapeake confirmed it received a voluntary document request from the SEC seeking information on its accounting methodology for the acquisition and classification of oil and natural gas properties.
A securities class action lawsuit was filed in federal court on October 4 against Chesapeake and certain officers and directors of the company. The lawsuit, filed in the U.S. District Court for the Western District of Oklahoma, alleges violations of federal securities laws for implied misstatements in Chesapeake’s SEC filings and other public disclosures. The lawsuit seeks certification as a class action, damages, attorneys’ fees and other costs.
OK Energy Today reported on September 30 that Chesapeake received a similar subpoena from the U.S. Department of Justice.
Chesapeake was also named as a defendant in a putative class action in federal court on October 14. This lawsuit, also filed in the U.S. District Court for the Western District of Oklahoma, alleges Chesapeake and other defendants have operated water disposal wells in a manner that has caused a succession of Oklahoma earthquakes. The proposed class would consist of property owners in an area encompassing 25 counties in the state. The lawsuit seeks reimbursement of insurance premiums and damages for injury to real property.
Meanwhile, the company remains a party to the April 19, 2016 shareholder litigation action filed in federal court alleging violation of and conspiracy to violate the federal Racketeer Influenced and Corrupt Organizations (RICO) Act, breach of fiduciary duties, waste of corporate assets, gross mismanagement and other SEC violations. This lawsuit seeks certification as a class action, damages, attorneys’ fees and other costs.
Chesapeake’s DOJ inquiry remains at the regulatory level for now. The company acknowledged it has received subpoenas and requests for documents, information and testimony in connection with investigations into possible violations of federal and state antitrust laws regarding Chesapeake’s purchase and lease of oil and natural gas rights in several states.
In addition to the DOJ, the Company also has responded to U.S. Postal Service and state subpoenas seeking information on Chesapeake’s royalty payment practices. Chesapeake continues to respond to the subpoena and document requests while engaging in discussions with federal and state agency representatives, according to the company’s quarterly report.