According to the law firm press release, Chesapeake engages in the acquisition, exploration, and development of properties for the production of oil, natural gas, and natural gas liquids from underground reservoirs in the United States. The Company holds interests in natural gas and liquids-rich resource plays across the United States. Chesapeake owns interests in approximately 32,400 oil and natural gas wells.
The Complaint alleges that throughout the Class Period, Defendants made false and/or misleading statements, as well as failed to disclose material adverse facts about the Company’s business, operations, and prospects. Specifically, Defendants made false and/or misleading statements and/or failed to disclose that: (i) Chesapeake had improperly accounted for the acquisition and classification of oil and gas properties; (ii) Chesapeake lacked effective internal financial controls; and (iii) as a result of the foregoing, Chesapeake’s public statements were materially false and misleading at all relevant times.
On September 29, 2016, pre-market, Chesapeake announced receipt of a subpoena from the U.S. Department of Justice “seeking information on [the Company’s] accounting methodology for the acquisition and classification of oil and gas properties and related matters.”
On this news, the Company’s stock fell $0.63, or 9.33%, to close at $6.12 on September 29, 2016.