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Houston American Energy Corporation : Glancy Binkow & Goldberg LLP Announces Investigation of Houston American Energy Corporation

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05/07/2012 | 11:45pm CEST

Glancy Binkow & Goldberg LLP announces that it is investigating potential claims against the board of directors of Houston American Energy Corp. ("Houston American" or the "Company") (NYSE AMEX: HUSA), concerning whether the board has breached its fiduciary duties to shareholders.

On April 27, 2012, a securities class action was filed in the United States District Court for the Southern District of Texas, Case No. 12-cv-01332, against the Company alleging that Houston American failed to sufficiently disclose problems with its Tamandua #1 well, and the well's C7 and C9 formations. Specifically, the complaint alleges that defendants concealed the fact that: (i) the continued investment in testing and completing the C7 and C9 formations in Tamandua #1 well was unproductive and not commercially viable; (ii) the Company lacked adequate internal and financial controls; and (iii) as a result of the foregoing, the Company's statements were materially false and misleading at all relevant times.

On March 1, 2012, the Company announced delays in drilling its Tamandua #1 well and claimed that further analysis of the well's C7 and C9 formations would be announced as soon as they became available. Following this announcement, the price of Houston American's stock fell $3.84 per share, or more than 35%, to close at $7.00 on March 1, 2012.

Then, on April 19, 2012, the Company ceased work on the C7 and C9 formations "due to formation damage while drilling." The Company also disclosed that the SEC is conducting a non-public formal investigation "to determine whether there have been any violations of the federal securities laws." In connection with the investigation, which commenced in October 2010, the Company received three SEC subpoenas that call "for the testimony of the Company's chief executive officer and chief financial officer and the delivery of certain documents." Following these revelations, the price of the Company's stock dropped $1.24 per share, or 35%, to close at $2.25 per share on April 19, 2012.

Our investigation concerns whether the Houston American board of directors has breached its fiduciary duties to shareholders, grossly mismanaged the Company, and/or committed abuses of control in connection with the foregoing.

If you are a shareholder of Houston American, if you have information or would like to learn more about these claims, or if you wish to discuss these matters or have any questions concerning this announcement or your rights or interests with respect to these matters, please contact Louis Boyarsky, Esquire, Glancy Binkow & Goldberg LLP, 1925 Century Park East, Suite 2100, Los Angeles, CA 90067, by telephone at (310) 201-9150 or Toll Free at (888) 773-9224 or by email to shareholders@glancylaw.com.

This press release may be considered Attorney Advertising in some jurisdictions under the applicable law and ethical rules.

Glancy Binkow & Goldberg LLP
Louis Boyarsky, Esquire
(310) 201-9150 or Toll Free (888) 773-9224

© Business Wire 2012
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