SEC Charges Former CEO of Medical Device Startup Stimwave with $41 Million Fraud

Miami, FL – In a significant development, the Securities and Exchange Commission (SEC) has charged Laura Tyler Perryman, the former CEO and co-founder of Florida-based medical device startup Stimwave Technologies Inc., with defrauding investors of approximately $41 million. This alarming case involves the creation and sale of a purportedly innovative medical device, part of which was discovered to be a fake, non-functional component implanted into patients’ bodies.

The SEC’s complaint, filed in the U.S. District Court for the Southern District of New York, alleges that during capital fundraising events from 2018 through 2019, Perryman made material misrepresentations about Stimwave’s peripheral nerve stimulation (PNS) device. This device, claimed to treat chronic nerve pain by delivering electrical signals to targeted nerves, included a transmitter, a receiver, and an electrode array. Shockingly, the smaller of the two receivers provided with the PNS Device was in reality a piece of plastic, rendering it non-functional.

Perryman is accused of misleading investors about the device’s FDA approval and its uniqueness in the market. Additionally, she allegedly made false statements regarding Stimwave’s historical revenues, revenue projections, and business model. Following the unraveling of this fraud in late 2019, Stimwave voluntarily recalled the PNS Devices and eventually filed for bankruptcy.

Monique C. Winkler, Director of the SEC’s San Francisco Regional Office, emphasized the gravity of the situation, stating, “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.”

The SEC seeks permanent injunctions, including a conduct-based injunction, disgorgement plus prejudgment interest, a civil penalty, and an officer and director bar against Perryman. In a parallel action, the U.S. Attorney’s Office for the Southern District of New York has filed criminal securities fraud charges against her.

This case highlights the SEC’s dedication to protecting investors and the integrity of the medical device market. It serves as a stark reminder of the importance of transparency and honesty in investor relations and the severe consequences of fraudulent activities.