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$1.3 billion in Executive Margin Calls

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October 29, 2008 – Comments (2)

These are the guys "making" money for you...

2 Comments – Post Your Own

#1) On October 29, 2008 at 4:12 PM, chk999 (99.97) wrote:

Glad I'm not Aubrey McClendon right at this moment, that hadda sting.

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#2) On October 29, 2008 at 4:34 PM, sobodobo75 (73.92) wrote:

I'm really intrigued by these scnearios but I haven't totally made the connection on the specifics.  Executives are pledging their own stock as collateral for what precisely? As collateral in a margin account in order to leverege up on their already signficant long position in company stock?  For taking long or short positions in other stocks?  As collateral for some other type of loan, commercial, residential or business-related?  I'm not sure.

The Chesepeake example is bananas though.  Having to dump $500+ mil of stock on a margin call? Like many others I happen to like CHK's long-term prospects, but I've gotta question the judgement of putting that amount of money at risk like that. Definitely gives me pause.

Also, do executives have to report when they are using company stock as collateral for a loan?  Seems like they must have to since the article points to other companies with highly-leveraged execs. How else would the Journal know?

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