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Tuesday, September 9, 2014

Chesapeake Energy to face racketeering charges in Michigan trial, (NYSE: CHK)

Natural gas and oil producer Chesapeake Energy Corp must face trial on charges of felony racketeering and using false pretenses related to its land-leasing practices, a state judge has ruled. Cheboygan District Court Judge Maria Barton ruled on Monday that Oklahoma-based Chesapeake go to trial on one charge of racketeering and 20 counts of using false pretenses to allegedly defraud private landowners in the state during an oil and gas leasing boom in 2010. Barton ruled after a hearing last month. No trial date has been set.State Attorney General Bill Schuette brought the charges against Chesapeake in June, alleging the company directed its leasing agents to lock up land positions in the state by offering signing bonuses to private landowners.Later, when Chesapeake's competitors in the region slowed down their leasing, Chesapeake's agents allegedly canceled the deals, claiming that mortgages on the properties were grounds for not honoring the deals after earlier assurances that would not be an issue.As a result, Chesapeake obtained "uncompensated land options from these landowners by false pretenses, and prevented competitors from leasing the land," the state charged.

Chesapeake Energy Corporation (Chesapeake) is a natural gas and oil exploration and production company. Shares of CHK traded higher by 0.61% or $0.155/share to $25.74. In the past year, the shares have traded as low as $22.63 and as high as $29.92. On average, 7563490 shares of CHK exchange hands on a given day and today's volume is recorded at 4005906.