Yields are higher as well today. There you see the twoyear note at its highest level since january 14th. But we begin with a bombshell of a story in the energy world. Former Chesapeake Energy ceo Aubrey Mcclendon charged by the Justice Department with conspireing to rig bids. Chesapeake putting out a statement saying it has been actively cooperating in the investigation, end quote, and does not expect to face criminal prosecution or fines related to the matter. Mcclendon responding on his own behalf saying, quote, the charge that has been filed against me today is wrong and unprecedented. But mcclendon left chesapeake three years ago and is one of the owners of the Oklahoma City thunder basketball team. Joining us, the reuters reporter who is part of a team that first broke the story, hes been working on it for a number of years and joins us now. Josh, thank you very much for joining us. Get to heart of the matter and what i find most interesting peculiar about this, that generally in a conspiracy it is a lot of people. He was the only one named. How come . Right. I wish i had an answer for that, brian. The indictment only names Aubrey Mcclendon but says that he colluded with a coconspirator who remains unnamed and another company was a coconspirator in what the doj is alleging was a bid rigging scheme that went on for years in oklahoma. The doj said its investigation is continuing. And the question of whether there may be more indictments down the road, i dont think it is one that has been answered yet. I dont think people realize at home, maybe they know mcclendons name or the Oklahoma City thunder or chesapeake. This was one of the most aggr s aggressive land buying and land leasing campaigns in the history of the United States, correct . The doj is saying this was not just aggressive, that it was unlawful. What is he accused of doing specifically, josh . Well, as you said, the allegations are in oklahoma, which is obviously at the heart of the oil drilling boom in recent years, but, of course, when Aubrey Mcclendon was ceo of chesapeake, that company undertook a huge land leasing boom, some would say the biggest land leasing boom since the gold rush of the 1850s. What is he accused of . Hes accused of essentially contacting, being in communication with a coconspirer is, a coconspirator company, and divvying up land leases in oklahoma, agreeing with a coconspirator not to bid on certain leases, and then dividing up the leases that each company would capture at a later date in restraint of trade. So thats why the doj is pursuing here charges of a sherman act violation, antitrust violations, that could carry stiff penalties. Are the losers people who own the land, theyre sitting on a lot of natural gas, and people like Aubrey Mcclendon, another company, comes along or dont come along and say we want to bid on whats down there and if you have fewer bidders, youre going to get less money for it, right . There was a huge competition across the shale patches and across the country during the shale boom, but exactly. When you have alleged arrangements between companies, where they decide to avoid bidding against each other in certain areas, especially if those companies are the main players in those areas at the time, then who loses . Well, potentially, the landowners who hope that companies will compete against each other to buy their leases. They have gas or oil under their properties. And who end up, you know, allegedly conspireing to just not do that. Mr. Mcclendon is the only person named so far. Could there be fileup charges . In theory, at the time the alleged conspiracy was going on, all the land, all the leases would have been worth a lot more money. And in an open bidding process, one that was not rigged, these landowners could have reaped a bigger profit off the lease. Thats the theory now. I dont know whether there will be any more indictments. I dont think we know what the doj has said is that it is continuing what has so far been a fouryear investigation into potentially anticompetitive behavior in the shale patch. So time will tell. Im naive about this sort of thing. Is it possible two questions. Is it possible the reason there is not a coconspirator named or another party named, that that party is cooperating with the Justice Department, number one. Number two, there is a history here of chesapeake being involved in, i believe criminal proceedings in michigan, having to do with similar things. Is there a nexus between that case, which the company settled by paying a fine, and this one . Right, so to your first question, you know, chesapeake itself said it has been cooperating with the doj for years on this investigation. It has said that it does not expect to face charges or penalties. So what was your second question . My question really was could not chesapeake per se, but could is the fact that other companies were not named or other individuals were not named, does it suggest in any way that maybe they are cooperating with the Justice Department in return for not being named right now . I wish i knew the answer to that question. It is something to ask the Justice Department because unfortunately i dont know the anser. What is the nexus between the cases of those in michigan and these in oklahoma if any . Looking back, when we first wrote the story in 2012 in michigan, what we found were emails between a chesapeake and its competitor in that shale region, one of them, for instance, had Aubrey Mcclendon telling actually a deputy of Chesapeake Energy, it is time to smoke a peace pipe with competitor in cannia to avoid bidding each other up on land prices. Well, the doj, as we understand it, commenced its investigation into this stuff in michigan, and it actually closed the investigation in michigan, but was continued by the states attorney general. So both chesapeake and cannia, the competitor in michigan, ended up settling charges with michigans attorney general, chesapeake paying up to 25 million in that settlement which was announced last year. As we understand it, the investigation then that doj continued expanded then into other states and that is how oklahoma came into the picture. Aubrey mcclendon is such a colorful figure, a controversial figure, a pioneer, a visionary, a lot of people may not know he got involved in funding the swift boat ads that were so critical of john kerry when he was running for president , took out full page ads to support the Duke Lacrosse Team after they were falsely accused of rape, duke graduate. Im wondering if there is something in this, hes very willing to be obviously the tallest male out there. And if in some ways that didnt also help attract the doj to him in ways that wouldnt have occurred with other ceos. Was he a target, josh, is the question . There has been a very public falling out between chesapeake as his former company and Aubrey Mcclendon since he left in 2013. He is a household name in the energy industry. Hes known for having been one of the most aggressive in this leasing boom that went on for years. And so i wouldnt i wouldnt know whether the doj considers him the best or, you know, target. However, hes a household name, he revolutionized in many ways the shale drilling industry. So, you know, whether the doj, whether the doj takes that into account, you have to ask the doj, i suppose. Real pleasure to get you on the program. Very interesting story involving a high profile guy to michelles point. Thank you. Great reporting. See you soon. Thanks a lot. The battle over encryption is known as a cybersecurity guru in silicon valley. Amazon, google, uber, well talk apple versus fbi, how tech and government can join forces on cybersecurity and about the investing climate in the valley now. Youre watching cnbc, first in business worldwide. Woman is that a newspaper . Man yes. Woman its quaint. Man did you read about this latest cyber attack . Woman yeah, i read it on my watch. Man funny. Woman they took out the whole network. Man they had to hand out pens and paper. Woman yeah. Man could it happen to us . Woman no. Were okay. Man we are . Woman yeah, we brought in some new guys. Man what do they know that we dont . Woman that you cant run a country with pens and paper. Its not just security. Its defense. Bae systems. Welcome back to power lunch. Chipotle shares up 3 in trading today. Raising the price target on the stock to 613 a share. It was 536 prior. Saying the restaurant chainsaw a better than expected uptick in customer traffic last month. The company does maintain a buy rating on the stock. Shares about 9 this year. They are already now trading above the average analyst estimate about 492 a share. Back over to you. Power lunch exclusive with a leading cybersecurity expert. Ted sline. Hes about to host a keynote speech and i believe sit down and talk with defense secretary ash carter at a security conference under way in San Francisco. Welcome. Good to have you with us. Thank you for having me. You bet. I want to begin by playing a sound bite, which i hope you can hear that we had last week with john mcafee, i think of him in a way as the donald trump of cybersecurity in that hes prone to say provocative things. Lets listen in here and then ill follow up with a question. If apple falls, so will android and google and so will every one and we are then in a world of hurt. We will be defenseless as a nation in the up and coming cyberwar. And as a people, we will lose everything to the hackers who go, oh, heavens, we dont have to do any work anymore, we have the back door to go into. You heard what he said there, hes depositing a domino theory of cybersecurity hinging on the apple case that is so much in the news. Were in a cyberwar and we will lose everything. Do you see it quite that way . Well, ill try and interpret what i think mcafee is saying. I think if we think were going to come up with a general purpose way to solve this problem and create a general purpose back door, it will weaken owl of our security infrastructure for our communications systems. And that doesnt serve actually the good people, it certainly helps the pad peop s the bad pe. The bad guys stay safe, the good guys get hurt. And that doesnt work. So i think a general purpose solution as mcafee is saying at the end of the day would not work. Do you see the stakes in a cyberwar as apocalyptic as he seems to . Apocalyptic, i see the stakes as being pretty high. You cant get it the fundamental confidence of the internet, and if we shake users confidence using internet, i think that gets to some fundamental rules that we all engage by as an interconnected economy. So it is a big deal. And there is a good reason why were all fixated on this apple decision. What are you going to ask the defense secretary about it today . Well, i want to know why we got to the point that were at. It is pretty obvious to me that we need to create some very specific legislation that alous a tim cook to say yes. And i think we put him in an untenable position where he has to fight to get it to a point where he has the ability to say yes. It is not like anybody does not want to help the country around National Security. I certainly know tim cook would like to help the country around National Security as well. So can we get the Public Discourse and therefore out to the politicians to focus on something very specific on how to solve this particular problem rather than some general purpose new law that could be used in ways that set precedents that everyone is going to be scared of. How do you view this case ultimately . I was thinking about it more and i thought is this really a cybersecurity case or a privacy case . It is both. The privacy people sort of say, hey, if you give people the ability to gain access to any of the data, who knows, maybe my data is next and you end up in a privacy conversation. Im a cybersecurity guy at heart and i believe on this this is at the end of the day more of a security issue. You want to have safe and secure Communication Channels. We all do. I know if i talked to the secretary later, hes not going to argue with me he likes that safe and secure Communication Channels with his troops out in the field. So how do we ensure they get that level of safety . Yeah, make sure that the government can do due process with what it needs to do to keep us safe and secure against terrorism and as well as other organized crime factions. Ted, im wondering as you look out in the vc world, are there Companies Already working on socalled work arounds . Other sort of secure parallel Communications Networks that we dont even know about yet, but they see where this is going and there are already hard at work raising money to back it. Well, there actually are numerous secure Communication Channels that have nothing to do with apple or the iphone that can be used today. So even if you solve this as i said before, you can go do this, break the encryption algar rhythm s on behalf of a large number of users and another channel pops up. Is kleiner backing them with funds . No. The one company they have in a position is dionic security, which is building a way to have a Security Service where the data could be encrypted if it wanted to be encrypted and stay encrypted between companies. But not a communication channel, no. You said the stakes are high. My word was apocalyptic. You didnt choose to embrace that. But the stakes are high. Who is winning the cyberwar . The good guys or bad guys now . It is not a war you ever win. It is a war where we need to ultimately raise the stakes and make it more expensive to be a bad guy. And that means today it is really not it is a great how do you do that . How do you do that . So i think we actually have to start taking the fight a little bit to the bad guys. And this is a little bit more of a conversation around how to be more preemptive with attacks that are coming rather than what we have been is very reactive as an industry. And i think you see a lot of new technologies that is going to allow us to be more preemptive which will test our rules and laws because at the end of the day, as private citizens and as private industry, youre not allowed to take offensive capabilities against an attacker. I think were going to be analyzing that in the coming years. I think some people watching would see we introduced you as being part of the firm behind google, amazon, twitter. These are all companies that actually rely on us giving up our privacy, that exploit our personal data. Some people might be listening to you and saying, well, it sounds a little hypocritical backing all these firms and these companies that rely us to expose so much of ourselves. At the same time, backing apple when it comes to privacy. What would you say to them . I think every individual makes the decision what data theyre going to share. And i think when they engage in the rules of facebook, they clearly know how that data is going to be used and what data theyre giving them. Same thing with google. And so i think when people think theyre making a phone call, theyre sending a text or an email, they think it is private. So i think each one of those are very individual dependent but at the end of the day, it is an individual decision on how they want to interact with that service and do business with that company and it is known ahead of time. I think the rules are known ahead of time. Interesting conversation. Ted sline, thank you for being here. Have fun on stage later today. Our own eamon javers will speak with ash carter at 4 00 p. M. On closing bell. The rich and the real estate, well let you know where the wealthy are now buying big homes and how much they are spending. Plus coming up, a startup scaring the way night terrors. Were bringing scientifically proven technologies to improve your childs sleep. Will the panel keep this founder up at night . Does that really prevent other people from playing in your space . How do you defend market share against that thought of low cost offshore competition . Or will they call it a dream . Stay tuned to find out. Ow. Are you okay . Yeah, i just got charged for my credit monitoring. Thats how i know its working. Ah. You know you can go on creditkarma. Com and check it out there. Its completely free. Really . Yeah oh, that didnt hurt at all. Yeah, completely painless. 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