SEC Charges Stimwave CEO With $41 Million Fraud For A “Fake Piece Of Plastic” Implanted Into Patients

The Securities and Exchange Commission (SEC) has charged Laura Tyler Perryman, co-founder and former CEO of medical device startup Stimwave Technologies Inc., with defrauding investors of approximately $41 million. The charges stem from allegations that Perryman made false and misleading statements regarding one of Stimwave’s medical devices, according to a complaint filed with the SEC on Tuesday.

The SEC’s complaint asserts that Perryman, during capital fundraising events from 2018 through 2019, misrepresented Stimwave’s peripheral nerve stimulation device (PNS Device). The device, designed to treat chronic nerve pain through electrical signals, allegedly included a fake and non-functional component that was implanted into patients’ bodies.

The PNS Device consisted of three main components: a transmitter, a receiver, and an electrode array. Perryman is accused of knowingly including a smaller, fake receiver made of plastic, which was allegedly implanted into patients’ bodies. The SEC contends that Perryman misled investors by claiming that the PNS Device was the only effective device of its kind on the market and had received approval from the U.S. Food and Drug Administration (FDA).

“Perryman knew, or was reckless in not knowing, that a primary component of the PNS Device—a receiver implanted inside patients’ bodies to help capture and amplify electrical signals—was, in reality, a fake, non-functional piece of plastic,” the complaint read.

Monique C. Winkler, Director of the SEC’s San Francisco regional office, stated, “We allege that Perryman touted a supposedly innovative medical pain-relief device while concealing that a primary component of the device was fake and that patients were unwittingly undergoing unnecessary surgeries to implant the non-functional component into their bodies.”

The SEC is seeking permanent injunctions, a civil penalty, disgorgement plus prejudgment interest, and an officer and director bar against Perryman.

This follows Perryman’s indictment by the U.S. Attorney’s Office for the Southern District of New York (SDNY) in March. She was arrested in Delray Beach, Florida, facing charges that include one count of conspiracy to commit wire fraud and health care fraud, as well as one count of health care fraud.

On Tuesday, SDNY escalated the legal proceedings by filing a superseding indictment against Perryman, introducing criminal securities fraud charges, as reported by the SEC.

In June 2022, Stimwave Technologies voluntarily sought Chapter 11 bankruptcy protection. The company’s assets were later acquired by Curonix, a peripheral nerve stimulation firm, towards the end of the year. Despite the voluntary recall of Stimwave’s peripheral nerve stimulation (PNS) devices, Curonix continues to offer a PNS system named Freedom PNS, as outlined on the Curonix website.

Information for this briefing was found via NBC, Financial Channel, and the sources mentioned. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.

Leave a Reply