Former Chesapeake Energy (CHK) CEO McClendon Dies in Car Accident

(Updated - March 2, 2016 2:56 PM EST)

(Updated - March 2, 2016 2:52 PM EST)

Former Chesapeake Energy (NYSE: CHK) CEO Aubrey McClendon said to have died in a car accident, according to CNBC.

McClendon was the founder of Chesapeake. He was 56.

On Tuesday, McClendon was indicted over allegations that he conspiring to rig bids for oil and natural gas leases while CEO of Chesapeake.

McClendon stepped down from Chesapeake in 2013.

UPDATE - Oklahoma City police have confirmed McClendon's death.

McClendon's vehicle, a 2013 Chevy Tahoe, was engulfed in flames when authorities arrived at the scene. The vehicle was said to be traveling faster than the posted speed limit, according to Oklahoma City police. McClendon was said to have driven the vehicle into the wall.

Below is the U.S. Department of Justice release regarding McClendon's indictment:

Aubrey K. McClendon has been charged by a federal grand jury with conspiring to rig bids for the purchase of oil and natural gas leases in northwest Oklahoma, the Department of Justice announced today.

The indictment alleges that McClendon orchestrated a conspiracy between two large oil and gas companies to not bid against each other for the purchase of certain oil and natural gas leases in northwest Oklahoma. During this conspiracy, which ran from December 2007 to March 2012, the conspirators would decide ahead of time who would win the leases. The winning bidder would then allocate an interest in the leases to the other company. McClendon instructed his subordinates to execute the conspiratorial agreement, which included, among other things, withdrawing bids for certain leases and agreeing on the allocation of interests in the leases between the conspiring companies.

“While serving as CEO of a major oil and gas company, the defendant formed and led a conspiracy to suppress prices paid to leaseholders in northwest Oklahoma,” said Assistant Attorney General Bill Baer of the Justice Department’s Antitrust Division. “His actions put company profits ahead of the interests of leaseholders entitled to competitive bids for oil and gas rights on their land. Executives who abuse their positions as leaders of major corporations to organize criminal activity must be held accountable for their actions.”

“The FBI is committed to investigating individuals who engage in corrupt criminal conduct,” said Special Agent in Charge Scott L. Cruse of the FBI’s Oklahoma City Division. “We will continue to work with the DOJ Antitrust Division to target those who devise schemes which create an unfair competitive advantage by way of bid rigging or other illegal means.”

The indictment, filed today in the U.S. District Court for the Western District of Oklahoma, alleges that McClendon’s conspiracy affected certain bids for leasehold interests and producing properties in northwest Oklahoma. Leasehold interests give a lessee the right to develop the land and to extract oil and natural gas from the land for a time period typically lasting three to five years. Producing properties are tracts of land where the existing lessee has drilled wells on the land and the wells are producing a stream of oil and/or natural gas. Purchasing a producing property includes not just the underlying leasehold interests to drill on the land, but also the producing wells and infrastructure already on the land.

Each violation of the Sherman Act carries a maximum penalty of 10 years in prison and a $1 million fine for individuals.

The charges contained in the indictment are allegations and not evidence of guilt. The defendant is presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.

This is the first case resulting from an ongoing federal antitrust investigation into price fixing, bid rigging and other anticompetitive conduct in the oil and natural gas industry. This investigation is being conducted by the Antitrust Division’s Chicago Office and the FBI’s Oklahoma City Field Office, with assistance from the U.S. Attorney’s Office of the Western District of Oklahoma. Anyone with information in connection with this investigation is urged to call the Antitrust Division’s Chicago Office at 312-984-7200, visit www.justice.gov/atr/contact/newcase.html or call the FBI’s Oklahoma City Field Office at 405-290-7770.

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