Robbins Arroyo LLP: Chesapeake Energy Corporation (CHK) Misled Shareholders According to a Recently Filed Class Action
Robbins Arroyo LLP announces that a class action complaint was filed against Chesapeake Energy Corporation (NYSE: CHK) in the U.S. District Court for the Western District of Oklahoma. The complaint is brought on behalf of all purchasers of Chesapeake securities between February 27, 2015 and September 28, 2016, for alleged violations of the Securities Exchange Act of 1934 by Chesapeake’s officers and directors. Chesapeake acquires, explores, and develops properties for the production of oil, natural gas, and natural gas liquids from underground reservoirs in the United States.
Chesapeake Accused of Implementing Ineffective Internal Controls
According to the complaint, throughout the class period, Chesapeake submitted multiple filings with the U.S. Securities and Exchange Commission stating that the financial information was accurate and disclosed any material changes to the company’s internal control over financial reporting. In its filings, Chesapeake noted that it “follows the full cost method of accounting under which all costs associated with oil and natural gas property acquisition, drilling and completion activities are capitalized.”
However, the complaint alleges that Chesapeake’s public statements were misleading because Chesapeake officials failed to disclose that Chesapeake had improperly accounted for the acquisition and classification of oil and gas properties and that it lacked effective internal financial controls. On September 29, 2016, Chesapeake announced that it had received a subpoena from the U.S. Department of Justice that inquired about the company’s accounting methodology for the acquisition and classification of oil and gas properties and related matters. On this news, Chesapeake stock fell $0.63 per share, or over 9%, to close at $6.12 per share on September 29, 2016.
Chesapeake Shareholders Have Legal Options
Concerned shareholders who would like more information about their rights and potential remedies can contact attorney Darnell R. Donahue at (800) 350-6003, or you can complete the form below and we will contact you directly.
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