The headquarters of the U.S. Securities and Exchange Commission (SEC) is seen in Washington, D.C., May 12, 2021.
Andrew Kelly | Reuters
Laura Tyler Perryman, co-founder and former CEO of the medical device startup Stimwave Technologies, was charged with allegedly defrauding investors out of $41 million by making “false and misleading” statements about certainly one of its devices, in line with a criticism filed with the U.S. Securities and Exchange Commission Tuesday.
The criticism alleges that Perryman misrepresented a Stimwave device that was supposedly capable of treat chronic nerve pain by utilizing electrical signals. The device is made up of a transmitter, an electrode array and a receiver, which was “in point of fact, fake and nothing greater than a chunk of plastic,” in line with the SEC. The fake and non-functional component was allegedly implanted into patients’ bodies, the criticism said.
Perryman also allegedly told investors that the device, called the peripheral nerve stimulation (PNS) device, was “the one effective device of its kind in the marketplace” and had been approved by the U.S. Food and Drug Administration, in line with the SEC.
“We allege that Perryman touted a supposedly progressive 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,” Monique C. Winkler, director of the SEC’s San Francisco regional office, said in a release.
The criticism charges Perryman with violating the antifraud provisions of federal securities laws. The SEC is in search of everlasting injunctions, a civil penalty, disgorgement plus prejudgment interest and an officer and director bar, in line with the filing.
Perryman didn’t comment and directed CNBC to her lawyer, who didn’t immediately respond.
The SEC’s criticism follows Perryman’s indictment by the U.S. Attorney’s Office for the Southern District of Recent York in March. She was arrested in Delray Beach, Florida, and charged with one count of conspiracy to commit wire fraud and health care fraud, and one count of health care fraud, in line with a release.
The SDNY on Tuesday filed a superseding indictment against Perryman that added criminal securities fraud charges, the SEC said.
Stimwave filed for voluntary Chapter 11 bankruptcy protection in June 2022. Curonix, a peripheral nerve stimulation company, acquired Stimwave’s assets late last yr. Stimwave voluntarily recalled the PNS devices, but Curonix still offers a PNS system called Freedom PNS, in line with the Curonix website.
Representatives for Curonix didn’t immediately reply to CNBC’s requests for comment.
