Pain mitigation company Calmare Therapeutics is facing an investor suit filed this week in New York federal court claiming the company made false statements and misled investors.
Investors in the suit are looking to recover millions of dollars of damages caused by the company’s’ alleged illegal conduct, citing violations of federal security laws and the dissemination of false and misleading statements to investors and the public.
“These statements were made to conceal defendants’ egregious mismanagement of the company, corporate waste, and self-interested transactions,” the plaintiffs claim, according to court documents.
The Fairfield, Conn.-based company’s flagship product is its Calmare Pain Therapy Device, which is designed as a non-invasive and non-addictive neuropathic pain treatment modality, and has FDA 510(k) clearance. The device is designed to treat post-amputation phantom pain, offering prolonged pain mitigation for 3 to 4 months, with certain patients experiencing full pain elimination up to a year or more, the company claims.
The suit looks to recover damages from both Calmare and 4 of its directors, including its chief exec Conrad Mir. The plaintiff claims that the company used company funds to pay for personal and unnecessary expenses.
Plaintiffs also claimed that despite significant investments, they were prevented from day-to-day involvement with the company and were not “privy to any inside information,” claiming to have been rebuffed by the board of directors.
“The individual defendants have failed to fulfill their fiduciary obligations and have instead undertaken in a pattern of self-dealing, abuse and oppression, resulting in significant harm to the company, as well as plaintiffs’ interest in the company,” the plaintiffs wrote in court documents.
The plaintiffs are seeking compensatory damages to be determined at the trial, pre and post judgement interest, punitive damages, attorney and legal fees as well as access to the company’s books and records.