Quite incredible -- as reported in The New York Times last week which quotes Reuters -- that Chesapeake Energy's chief executive Aubrey K. McClendon, while acting as Chesapeake's Chairman and CEO had run a "hedge fund that traded commodities, including natural gas futures, for at least four years while he led Chesapeake's vast expansion of gas drilling" and oversaw his companies' hedging activities in oil and gas futures. The $200 million fund, Heritage Management Company, used Chesapeake's Oklahoma City headquarters as its mailing address.
Certainly nice work if you can get it. And that's the rub, according to our heavily lobbied Commodity Exchanges and Wall Street-influenced law -- commodity trading is more loosely regulated than equity markets. Referring to McClendon's catbird seat at the gaming table Morningstar analyst Mark Hanson was quoted in the article picked up from Reuters, "If he knows Chesapeake is to ramp up or curtail production, he could enter into positions in his hedge funds that could benefit from that." Had it been the stocks and bonds of his company trading on insider information, the SEC would have made an appearance bearing handcuffs.
Here we have this enormous dichotomy between insider trading in stocks and bonds, and commodities. The difference being, with commodity trading most everyone is impacted. Insider trading in oil and gas, as Chevron showed us wherein Chevron traders held oil and product contracts for 27 million barrels of oil and trading profits (remember, not producing and selling, but trading alone) for the first seven months of 2011 alone of over $260 million -- profits that came from trades, that one can well assume were not meant to push prices of their core products down, and thus those trading profits were underwritten by the rest of us in higher gasoline, heating oil, diesel prices.
As I said, it's good work if you can get it. And it is long overdue that commodities trading oversight and regulation be put on the same playing field as trading in stocks and bonds, with the same level of enforcement -- both civil and criminal -- as those that apply to insider trading under our securities laws.
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Brendan DeMelle: What Chesapeake Energy's Financial Scandals Mean for the Rest of Us
This is shocking. I recognize it is not illegal, but it is overtly crooked. The only entity that should be hedging with natural gas futures at Chesapeake Energy should be Chesapeake itself. This hedge fund amounts to an uregulated and undeclared bonus pool for Aubrey K. McClendon and his friends invested in the fund.
I can't believe Chesapeake shareholders tolerate this unethical behavior. Chesapeake must be corrupt throughout.
http://finance.yahoo.com/news/study-says-broker-rebates-cost-124005422.html?l=1
"In recent years, though, brokers have had another enticement that can pull them in a different direction: payments from stock exchanges in return for sending them business.
The practice has attracted criticism from several industry participants and former regulators who say the so-called rebates that the exchanges pay Wall Street firms could give those firms an incentive to profit at the expense of investors. Now a new study using industry data says that the rebates could be costing mutual funds, pension funds and ordinary investors as much as $5 billion a year.
The 75-page study, being released this week, was written by Woodbine Associates, a financial consulting firm that does business with players on all sides of the issue. Woodbine said the report was done independently, without support from industry participants."
Until then, they will continue to become victims of their own fraudulent leaders who they foolishly aspire to and worship as Pharaohs and God-kings, turning them into SUCKERS as well.
Who at CME Group Inc Gave him over $1 MIL ?......Sen Saxby Chambliss' son, Bo Chambliss whom was a lobbyist and a director at CME Group Inc.
The same Saxby Chambliss that had commercials running during his last campaign depicting Sen Max Clelland, the decorated vet of Vietnam War that lost 2 legs and an arm in Vietnam.
GEORGIA WOULD DO MUCH BETTER WITHOUT THESE PEOPLE SUCH AS SAXBY CHAMBLISS IN OFFICE AND PROFITTING OFF THE AMERICAN PEOPLE.