Reuters unloads another outstanding scoop on the sketchy doings of Chesapeake Energy Aubrey McClendon, reporting that the CEO ran a hedge fund inside Chesapeake from 2004 to 2008 that bet on natural gas.

While Reuters notes up high that insider trading isn’t illegal in commodities, McClendon’s moonlighting as a fund manager was never disclosed to investors and perhaps not even to the company’s overly friendly board of directors.

In Chesapeake’s case, McClendon would have been aware of major decisions that could affect natural gas prices before that information became public. Accounting for 5 percent of U.S. natural gas production, Chesapeake holds tremendous sway over markets. On January 23, the company announced sharp output curbs in response to low prices. In response, U.S. natural gas futures surged by 8 percent the same day.

“If the company needs to make an operating decision which might move the market against the CEO’s positions, there’s a risk that will influence the decision-making at the top of the company,” said Jeff Harris, former chief economist at the market’s U.S. regulator, the Commodity Futures Trading Commission, and now professor of finance at Syracuse University.

Another potential problem is known as “front-running.” That’s when a trader buys or sells a commodity in advance of a client’s or his company’s orders. In theory, McClendon’s first-hand knowledge of Chesapeake’s own plans to trade would enable him to profit by trading ahead of Chesapeake - a move that could raise costs for the company.

I’d imagine the CFTC is going to want to take a very close look at this latest McClendon mess. And you’d have to guess Chesapeake shareholders would like to have known that the guy they were paying $112 million to run their company in 2008 was also “engaged in ‘near daily’ communications and ‘exhaustive’ calls to help direct the fund’s trading.”

This story follows closely on the heels of another one Reuters helped turn into a major headache.

After The Pittsburgh Post-Gazette very good scoop in late March that McClendon was borrowing against his share of Chesapeake’s wells, Reuters expanded the story in a major way, reporting that the CEO had borrowed more than a billion dollars against the assets from lenders that included a private-equity fund that was purchasing Chesapeake assets. Chesapeake’s top lawyer said that the company’s board was “fully aware” of the deals, something the directors themselves later disputed (check out the company’s snippy PR response too)

The Reuters story sent Chesapeake shares tumbling two weeks ago (ADDING: Chesapeake shares were down 15 percent today after the story and a poor earnings report), and the stories led Chesapeake’s famously craven board to take action against the CEO. In 2008, after a margin call forced McClendon to liquidate 94 percent of his overlevered Chesapeake shares, helping crash the company stock, directors gave McClendon a $75 million bonus and bought his $12 million map collection. This week, they forced him out as chairman, and last week they and ended the sweetheart deal that gave McClendon a 2.5 percent share of all of Chesapeake’s wells.

That well participation program was supposedly so McClendon could “eat his own cooking,” as the company says. But in a nice Forbes cover piece in October, Christopher Helman (who noted McClendon poured at least ten thousand dollars worth of wine for them at their dinner meeting) pointed out that “McClendon’s participation has nothing to do with Chesapeake’s exposure above the ground, and it’s those highly complicated land deals that present an enormous risk.”

In other words, the company has seriously overborrowed to lease land on which it is now uneconomical to drill. McClendon’s well perk gave him full exposure to the company’s drilling without exposure to the company’s land speculation.

The Wall Street Journal reported last week that McClendon also did personal business with Chesapeake banker Wells Fargo, as well as with Goldman Sachs and Bank of America, both of which later landed Chesapeake’s IPO subsidiary. McClendon put what remained of his liquid assets up against Goldman’s money (emphasis mine):

In the Goldman Sachs filing, Mr. McClendon offered as collateral his wine collection, detailed on 78 pages listing the vintages held in his homes in Minnesota, Michigan, Bermuda and Oklahoma City.

Fine work by Reuters.

Ryan Chittum is a former Wall Street Journal reporter, and deputy editor of The Audit, CJR's business section. If you see notable business journalism, give him a heads-up at rc2538@columbia.edu.