United States SEC Charged Ex-CEO of Medical Device Startup Stimwave for Defrauding Investors $41 Million with False & Misleading Statements on Product & Financial Projection, Misrepresented Nerve Stimulation Device to Treat Chronic Nerve Pain Using a Small Receiver Which is Only A Piece of Plastic, Stimwave Filed for Bankruptcy in 2019
20th December 2023 | Hong Kong
The United States SEC (Securities & Exchange Commission) has charged the former CEO (Laura Tyler Perryman) of medical device startup Stimwave for defrauding investors $41 million with false & misleading statements on product & financial projection, misrepresenting nerve stimulation device to treat chronic nerve pain using a small receiver which is only a piece of plastic. Stimwave filed for bankruptcy in 2019. United States SEC: “The Securities and Exchange Commission today charged Laura Tyler Perryman, the former CEO and co-founder of Florida-based medical device startup Stimwave Technologies Inc., with defrauding investors out of approximately $41 million by making false and misleading statements about one of the company’s key medical device products. According to the SEC’s complaint, the medical device comprised several components, one of which was a fake, non-functional component that was implanted into patients’ bodies … … The SEC’s complaint alleges that Perryman knew, or was reckless in not knowing, that the smaller receiver was, in reality, fake and nothing more than a piece of plastic. According to the complaint, Perryman misrepresented to investors that the PNS Device was approved by the U.S. Food and Drug Administration and was the only effective device of its kind on the market. The complaint also alleges that Perryman made false and misleading statements to investors about Stimwave’s historical revenues, revenue projections, and business model. After Perryman’s fraud unraveled in the fall of 2019, Stimwave voluntarily recalled the PNS Devices and eventually filed for bankruptcy.” More info below:
“ United States SEC Charged Ex-CEO of Medical Device Startup Stimwave for Defrauding Investors $41 Million with False & Misleading Statements on Product & Financial Projection, Misrepresented Nerve Stimulation Device to Treat Chronic Nerve Pain Using a Small Receiver Which is Only A Piece of Plastic, Stimwave Filed for Bankruptcy in 2019 “
Monique C. Winkler, Director of the SEC’s San Francisco Regional Office: “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. Investors are entitled to know material information about the products of the companies in which they invest. The SEC is committed to holding bad actors accountable.”
United States SEC Charged Ex-CEO of Medical Device Startup Stimwave for Defrauding Investors $41 Million with False & Misleading Statements on Product & Financial Projection
19th December 2023 – The Securities and Exchange Commission today charged Laura Tyler Perryman, the former CEO and co-founder of Florida-based medical device startup Stimwave Technologies Inc., with defrauding investors out of approximately $41 million by making false and misleading statements about one of the company’s key medical device products. According to the SEC’s complaint, the medical device comprised several components, one of which was a fake, non-functional component that was implanted into patients’ bodies.
- The SEC’s complaint alleges that, during capital fundraising events from 2018 through 2019, Perryman made material misrepresentations about Stimwave’s peripheral nerve stimulation device, or PNS Device, which purported to treat chronic nerve pain by delivering electrical signals to targeted nerves. The device consisted of three key components: (1) a transmitter; (2) a receiver; and (3) an electrode array. The transmitter was worn by patients in a pouch outside the body and sent a wireless signal into the body. A receiver and electrode array were implanted inside patients’ bodies and were together supposed to receive the signal and convert it into electrical currents that stimulated target nerves. As alleged, Stimwave included two receivers of different sizes with the PNS Device, the smaller of which was designed to be used when the larger receiver was too big to implant. The SEC’s complaint alleges that Perryman knew, or was reckless in not knowing, that the smaller receiver was, in reality, fake and nothing more than a piece of plastic. According to the complaint, Perryman misrepresented to investors that the PNS Device was approved by the U.S. Food and Drug Administration and was the only effective device of its kind on the market. The complaint also alleges that Perryman made false and misleading statements to investors about Stimwave’s historical revenues, revenue projections, and business model. After Perryman’s fraud unraveled in the fall of 2019, Stimwave voluntarily recalled the PNS Devices and eventually filed for bankruptcy.
- The SEC’s complaint, filed in the U.S. District Court for the Southern District of New York, charges Perryman with violating the antifraud provisions of the federal securities laws. The SEC seeks permanent injunctions, including a conduct-based injunction, disgorgement plus prejudgment interest, a civil penalty, and an officer and director bar.
In a parallel action, the U.S. Attorney’s Office for the Southern District of New York today filed a superseding indictment against Perryman that added criminal securities fraud charges.
The SEC’s investigation was conducted by Yoona Kim and supervised by David Zhou and Jason H. Lee of the San Francisco Regional Office. The SEC’s litigation will be led by Marc D. Katz and Ms. Kim. The SEC appreciates the assistance of the U.S. Attorney’s Office for the Southern District of New York and the FBI.
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