Saying that Some Devices were “just a piece of plastic,” the SEC Accuses the Former CEO of a Medical Device Company of Fraud

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Laura Tyler Perryman, the co-founder and former CEO of medical device startup Stimwave Technologies, is facing charges for allegedly defrauding investors of $41 million by providing false and misleading information about one of its devices, according to a complaint filed with the U.S. Securities and Exchange Commission (SEC) Tuesday.

The complaint contends that Perryman misrepresented a Stimwave device designed to treat chronic nerve pain using electrical signals. The SEC alleges that a component of the device, the peripheral nerve stimulation (PNS) device, touted as innovative and FDA-approved, was, in fact, a non-functional piece of plastic. This phony component was allegedly implanted into patients’ bodies.

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’s complaint accuses Perryman of violating federal securities laws’ antifraud provisions. In addition to disgorgement and prejudgment interest, the SEC is requesting permanent injunctions, a civil penalty, and a bar for officers and directors.

Perryman faces charges filed by the U.S. Attorney’s Office for the Southern District of New York in March, including conspiracy to commit wire fraud and health care fraud. On Tuesday, the SDNY added criminal securities fraud charges to Perryman’s indictment.

Stimwave filed for voluntary Chapter 11 bankruptcy protection in June 2022, and its assets were acquired by peripheral nerve stimulation company Curonix. Stimwave voluntarily recalled the PNS devices, but Curonix continues to offer a PNS system called Freedom PNS.

Representatives for Curonix did not immediately respond to requests for comment.

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