The SEC charged Laura Perryman, former Stimwave CEO and co-founder, with defrauding investors out of approximately $41 million.
Perryman founded and served as CEO of Florida-based Stimwave until her termination in 2019. In February 2020, Stimwave ceased all sales of its high-frequency spinal cord stimulation systems in exchange for the dismissal of a patent infringement lawsuit brought by rival Nevro.
Stimwave filed for bankruptcy on June 15, 2022. Perryman was arrested after the DOJ filed a two-count indictment against her in March of this year.
In the SEC’s charges, announced on Dec. 19, the commission claims Perryman made false and misleading statements about Stimwave’s key product. This device comprised several components. One was a fake, non-functional component implanted into patients’ bodies, the SEC says.
What the SEC said about Perryman and Stimwave
The SEC alleges that, during capital fundraising events from 2018 through 2019, Perryman made material misrepresentations about the device. Stimwave claimed the device, a peripheral nerve stimulation (PNS) device, treated chronic nerve pain. It featured a transmitter, receiver and electrode array.
Its transmitter, worn by patients in a pouch outside the body, sent a wireless signal into the body. The receiver and array, implanted inside the body, should then receive the signal. They’d then convert the signal to electrical currents that stimulated targeted nerves.
As alleged, Stimwave included two receivers of different sizes. The SEC says the smaller receiver of the two was fake — nothing more than a piece of plastic. According to the SEC, Perryman misrepresented to investors that the FDA approved the PNS device. Other allegations include false and misleading statements about historical revenues, revenue projections and the Stimwave business model.
The SEC seeks permanent injunctions, including a conduct-based injunction, disgorgement plus prejudgment interest, a civil penalty and an officer and director bar.
“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,” said Monique C. Winkler, Director of the SEC’s San Francisco Regional Office. “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.”