Rockwell Medical Inc. (Nasdaq: RMTI) has filed a countersuit against its former chief medical officer, alleging that he overstated his qualifications, breached a confidentiality agreement and made false and defamatory statements about the company to third parties.

Rockwell Medical brought its action against Dr. Richard C. Yocum in state court in Michigan, which it is based. It is seeking a restraining order, as well as injunctive relief and financial damages.

Rockwell Medical fired Yocum from his job as vice president of drug development and medical affairs in September 2011. As Sharesleuth previously reported, Yocum alleged in a wrongful-termination suit that he was ousted because he repeatedly complained to Robert L. Chioini, the company’s chairman and chief executive, about violations of Securities and Exchange Commission and Food and Drug Administration rules.

Among other things, Yocum alleged that certain press releases issued in 2010 and 2011 made it appear that clinical trials for a new product called Soluble Ferric Pyrophosphate were going better than they actually were.

Rockwell Medical makes and distributes dialysis products. It is conducting Phase III clinical trials of SFP, which is used to deliver water-soluble iron into the bloodstream during dialysis treatment. The iron helps combat anemia, a common side effect in patients with end-stage renal disease.

Rockwell Medical is hoping that the trials prove SFP is not only safe for patients, but effective in treating their underlying conditions. It says the product is aimed at a market worth $600 million a year in the United States and $1 billion a year globally.

Yocum alleged in his suit that Rockwell Medical:

–falsely claimed that the results of its earlier Phase IIb studies of SFP were positive, despite the fact that they failed to demonstrate that the treatment was effective.

– falsely claimed that the Phase IIb trials produced clear dosing data.

– falsely claimed that the company had an agreement with the FDA on the design of its Phase III clinical trials.

– proceeded with those trials despite unresolved differences with the FDA, without correcting its public statements and informing investors of those differences.

– announced an unrealistic date for bringing SFP to market, disregarding Yocum’s much longer timetable.

– failed to modify its Phase III trials to account for changes in FDA product labeling for erythropoiesis-stimulating agents, which are used to treat anemia and would likely be taken by all of the participants in the trials.

Rockwell Medical alleged in its filing last week that Yocum withheld vital information from management in early 2010 regarding the SFP program. It said that the “deliberate and negligent omission of data’’ was not discovered until  months later, after considerable expense to the company.

Rockwell Medical also alleged that, at the time he was hired, Yocum made false and misleading representations about his experience and successes in dealing with the FDA on clinical programs.

In addition, Rockwell Medical  said that he performed his duties in a fraudulent and incompetent manner. It said an investigation found that Yocum – who was based in San Diego rather than at company headquarters – did “little or no work, evading work and conducting private activities throughout each and every work day.’’

Finally, it said that in the final months of his employment, Yocum made false and defamatory statements about the company and its SFP program to third parties and investors, revealing confidential information.

Sharesleuth’s story on Yocum’s allegations was based entirely on his lawsuit and the company’s SEC filings.

Rockwell Medical said Yocum’s statements have harmed its reputation, hindered its business relationships and hurt its stock price, reducing its market capitalization by $50 million.

Rockwell Medical noted that soon after Yocum was fired, he began working for another pharmaceutical company, making significantly more in compensation and benefits than he received in his former job.

Houston American Corp. (AMEX: HUSA) says the Securities and Exchange Commission’s investigation into the company appears to be focused on disclosures about the potential of its CPO-4 prospect in Colombia in late 2009 and early 2010.

Houston American, which was the subject of a Sharesleuth story in the summer of 2010, provided additional details of the investigation in a new SEC filing covering the sale of $10 million in stock.

Houston American said in the filing that it had provided the SEC with information supporting its disclosures about the resource potential of the CPO-4 prospect. It said it would be discussing that material with the SEC this month.

Houston American’s stock has fallen from a high of $20.36 a share in April 2010 to its current price of 63 cents. The first two wells that the company and its partners drilled on the CPO-4 prospect produced no oil.

The third is more than half way to its targeted depth.

Houston American said in an investor presentation and a related SEC filing in November 2009 that the CPO-4 prospect was estimated to hold anywhere from 1 billion barrels to 4 billion barrels of “recoverable reserves.’’

As Sharesleuth noted in our original story, the higher figure exceeded the official proved and probable reserves for all of Colombia.

Houston American said in its latest filing that the SEC began an informal inquiry into the company in October 2010, which turned into a formal investigation on March 1, 2011. It  said it received a subpoena from the agency in February of this year.

Houston American publicly disclosed the investigation in April, saying it had received subpoenas calling for the testimony of its chief executive officer, John F. Terrwilliger; its chief financial officer, John J. Jacobs, and for the delivery of certain documents.

Last year, Sharesleuth.com published a story questioning whether Kandi Technologies Corp. (NASDAQ: KNDI) had truly sold more than 3,700 of its electric cars, as it reported in Securities and Exchange Commission filings.

Among other things, we wondered how Kandi managed to sell 1,618 of those vehicles in 2010, given that the United States was its main market, and that the federal government and some state governments had significantly reduced tax credits for buyers.

Kandi, a Chinese company that also makes go karts and all-terrain vehicles, said in a letter to shareholders after our story appeared that it stood by its sales numbers.

But the company’s latest annual filing with the SEC raises further questions. In a footnote to a chart detailing unit sales by product, Kandi said that 960 of the 1,618 mini-cars it reported selling in 2010 were, in fact, gas-powered rather than electric.

The distinction is notable because Kandi says its electric cars are one of the main drivers of its growth, and the breakdown in its latest annual report shows that sales of those vehicles actually plunged in 2010.

The company reported selling 1,892 electric vehicles in 2009, including nearly 1,000 in the final quarter of that year.

Kandi did not mention in its 2010 earning releases or quarterly SEC filings that the majority of the vehicles it was selling that year were conventional gas-powered models.

In announcing Kandi’s earnings for the first three months of 2010, Chairman Xiaoming Hu said that sales in the quarter had risen for its “COCO EV,’’ a clear reference to the company’s electric vehicles.

Kinda reported selling 372 Cocos in that quarter, up from 169 a year earlier. The Coco is a golf-cart like vehicle, approved for street use, with a top speed of around 35 miles an hour.

The release for the second quarter of 2010 said this: “The company reported that the top contributor to the revenue gains in the period was its all electric COCO LSV, with sales of 1,005 units, primarily in the U.S., generating $4,131,674 in revenues.’’

Kandi said in the release that it sold 1,377 mini cars in the first half of 2010, compared with 474 a year earlier. It said that revenue for the period was up 80 percent, and that profits were up 435 percent.

Given that Kandi reported selling just 241 mini cars in the second half of 2010, it is clear that most of the gas-powered units would have been sold in the first half of that year — at the time that the company was reporting higher electric vehicle sales.

And given that the company said in its latest annual filing that it sold only 658 electric mini-cars for all of 2010, it would have been impossible for the company to have sold 1,005 in the second quarter, as the earnings release for that period asserted.

Houston American Energy Corp. (AMEX: HUSA) has disclosed that it is the subject of formal investigation by the Securities and Exchange Commission.

Houston America, which was the subject of an earlier Sharesleuth investigation, said it had received three subpoenas from the SEC since February. The subpoenas called for testimony by the company’s chief executive officer, John F. Terwilliger and its chief financial officer, John J. Jacobs, as well as the delivery of certain documents.

Houston America said the SEC’s probe began as an informal inquiry in October 2010. The company said it was disclosing the investigation after determining that certain third parties had become aware of it.

Houston American also announced that the company and its partners were abandoning their initial well on a new Colombian oil prospect known as CPO-4. It had previously said that although the well, the Tamandua No.1, showed possible signs of oil or natural gas, the formation had become damaged during the drilling process.

Houston American said the partners in the well had reached the conclusion that continued investment in testing and completion of the well was inadvisable. It said the drilling rig would be moved to the next exploration site at CPO-4, with a start date for that well scheduled for May or June.

Houston American has a 37.5 percent interest in CPO-4, which is controlled by a Korean energy company called SK Innovation. Houston American has claimed in SEC filings that the prospect in Colombia’s Llanos Basin is estimated to hold anywhere from 1 billion to 4 billion barrels of “recoverable reserves.’’

Houston American’s stock fell by more than 40 percent after it announced the news about the unsuccessful well and the SEC investigation.

(Disclaimer: Mark Cuban, the majority owner of Sharesleuth.com LLC, has a short position in Houston American’s shares. Chris Carey, the editor of Sharesleuth, does not invest in individual stocks and has no position in Houston American’s shares. )

Houston American said it was uncertain of the scope of the SEC’s probe.

“The Company has cooperated fully, and is committed to continuing to cooperate fully, with the SEC in this matter,’’ it said in its release. “It is now possible at this time to preduct the timing our outcome of the SEC investigation, including whether or when any proceedings might be initiated, when these matters might be resolved or what, if any, penalties or other remedies would have a material adverse effect on the Company’s consolidated financial position, results of operations or cash flows.”

Houston American said the SEC began a nonpublic informal inquiry into activities involving the company in October 2010. It said the SEC ordered nonpublic formal investigation in March 2011.
Houston American said it received a copy of that order for a formal investigation in February of this year, in connection with the first subpoena from the agency.