SEC v. LAURA TYLER PERRYMAN, No. 1:23-cv-10985, Southern District of New York (Dec. 19, 2023) — Complaint

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MONIQUE C. WINKLER
JASON H. LEE
DAVID ZHOU
MARC D. KATZ
YOONA KIM
Attorneys for Plaintiff
SECURITIES AND EXCHANGE
COMMISSION
San Francisco Regional Office
44 Montgomery Street, Suite 2800
San Francisco, CA 94104
Telephone: (415) 705-2500
Facsimile: (415) 705-2501
Email: [email protected]; [email protected]

UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK
SECURITIES AND EXCHANGE
COMMISSION,
Plaintiff,
 v.
LAURA TYLER PERRYMAN,
Defendant.

COMPLAINT
1:23-cv-10985

JURY TRIAL DEMANDED
Plaintiff Securities and Exchange Commission (the “Commission”), for its complaint
against Laura Tyler Perryman (“Perryman”), alleges as follows:
SUMMARY
1. From April 2018 through July 2019, Perryman fraudulently raised approximately
$41 million for Stimwave Technologies Incorporated, a privately held medical device startup
formerly based in Pompano Beach, Florida (“Stimwave” or the “Company”) that Perryman co-
founded in December 2010 and led as its then-Chief Executive Officer.
2. Specifically, during Stimwave’s Series D funding round (the “Series D Funding”),
Perryman made materially false and misleading statements to investors about one of Stimwave’s
key products, a neurostimulation device system that used electrical currents to treat chronic pain
in peripheral nerves away from the spinal cord (the “PNS Device”).  Perryman knew, or was

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reckless in not knowing, that a primary component of the PNS Device—a receiver implanted
inside patients’ bodies to help capture and amplify electrical signals—was, in reality, a fake,
non-functional piece of plastic (the “Fake Receiver”).  Indeed, Perryman directed and approved
the creation of the Fake Receiver to include as part of the PNS Device so that doctors, who
purchased the PNS Devices and unwittingly implanted the Fake Receiver in patients, could
obtain significant reimbursement amounts from health insurance programs.  Those
reimbursements made it possible for Stimwave to charge doctors higher prices for the PNS
Devices compared to the devices without a receiver.
3. Perryman misleadingly told investors that the PNS Device was the only effective
peripheral nerve stimulation device on the market, and that the PNS Device, which included the
Fake Receiver, had been approved by the U.S. Food and Drug Administration (“FDA”), which
regulates medical devices.  In fact, the Fake Receiver was never cleared by the FDA.
4. Perryman also made numerous misrepresentations that gave investors the false
and misleading impression that the Company’s products and its business model, which depended
on health insurance reimbursements to doctors for device implantation procedures, would
generate reliable revenue.  In addition, Perryman overstated Stimwave’s historical revenues and
revenue projections to investors.
5. Perryman was the Company’s main point of contact for investors during the
Series D Funding.  Investors invested millions of dollars in Stimwave based on her
misrepresentations.
6. Perryman resigned as CEO in November 2019 after, among other things, her role
in the inflation of Stimwave’s historical revenues came to light.  Stimwave eventually initiated a
voluntary recall of all its PNS Devices in July 2020.  The Company subsequently filed for
Chapter 11 bankruptcy protection in June 2022, sold most of its assets, and ceased its operations.
7. By her actions, Perryman violated the antifraud provisions of the federal securities
laws, specifically Section 10(b) of the Securities Exchange Act of 1934 (“Exchange Act”) [15

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U.S.C. § 78j(b)] and Rule 10b-5 thereunder [17 C.F.R. § 240.10b-5], and Section 17(a) of the
Securities Act of 1933 (“Securities Act”) [15 U.S.C. § 77q(a)].
NATURE OF THE PROCEEDINGS AND RELIEF SOUGHT
8. The Commission brings this action pursuant to the authority conferred upon it by
Sections 20(b), 20(d), and 22(a) of the Securities Act [15 U.S.C. §§ 77t(b), 77t(d), and 77v(a)],
and Sections 21(d), 21(e), and 27 of the Exchange Act [15 U.S.C. §§ 78u(d), 78u(e), and 78aa].
9. The Commission seeks a final judgment: (a) permanently enjoining Perryman
from violating the federal securities laws and rules that this complaint alleges she has violated;
(b) permanently enjoining Perryman from, directly or indirectly, including, but not limited to,
through any entity owned or controlled by her, participating in the issuance, purchase, offer, or
sale of any security, provided, however, that such injunction shall not prevent Perryman from
purchasing or selling securities for her own personal accounts, pursuant to Section 20(b) of the
Securities Act [15 U.S.C. § 77t(b)] and Sections 21(d)(1) and 21(d)(5) of the Exchange Act [15
U.S.C. §§ 78u(d)(1) and 78u(d)(5)]; (c) ordering Perryman to pay disgorgement with
prejudgment interest, pursuant to Sections 21(d)(3), 21(d)(5), and 21(d)(7) of the Exchange Act
[15 U.S.C. §§ 78u(d)(3), 78u(d)(5), and 78u(d)(7)]; (d) ordering Perryman to pay civil money
penalties pursuant to Section 20(d) of the Securities Act [15 U.S.C. § 77t(d)] and Section
21(d)(3) of the Exchange Act [15 U.S.C. § 78u(d)(3)]; (e) prohibiting Perryman from serving as
an officer or director of any company that has a class of securities registered under Section 12 of
the Exchange Act [15 U.S.C. § 78l] or that is required to file reports under Section 15(d) of the
Exchange Act [15 U.S.C. § 78o(d)], pursuant to Section 20(e) of the Securities Act [15 U.S.C. §
77t(e)] and Section 21(d)(2) of the Exchange Act [15 U.S.C. § 78u(d)(2)]; and (f) ordering any
other and further relief the Court may deem just and proper.
JURISDICTION AND VENUE
10. This Court has jurisdiction over this action pursuant to Sections 20(b), 20(d),
20(e), and 22(a) of the Securities Act [15 U.S.C. §§ 77t(b), 77t(d), 77t(e), and 77v(a)] and
Sections 21(d), 21(e), and 27 of the Exchange Act [15 U.S.C. §§ 78u(d), 78u(e), and 78aa].

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11. Perryman, directly or indirectly, made use of the means and instruments of
interstate commerce or of the mails in connection with the acts, transactions, practices, and
courses of business alleged in this complaint.
12. Venue is proper in this District pursuant to Section 22(a) of the Securities Act [15
U.S.C. § 77v(a)] and Section 27(a) of the Exchange Act [15 U.S.C. § 78aa(a)].  Acts,
transactions, practices, and courses of business that form the basis for the violations alleged in
this complaint occurred in this District.  For example, Stimwave offered and sold securities in
this District, including to an investor in the Series D Funding who is based in this District;
Stimwave solicited and sold its devices to doctors and medical practices located in this District;
and Stimwave caused medical providers to seek reimbursement from health insurance programs
for implanting Stimwave devices in residents of this District.
DEFENDANT
13. Laura Tyler Perryman, age 55, is a resident of Delray Beach, Florida.
Perryman co-founded Stimwave in December 2010 and served as CEO through November 2019,
when she resigned.  Perryman also served as a director and co-Chair of the Stimwave Board of
Directors.
RELATED ENTITY
14. Stimwave Technologies Incorporated, a Delaware corporation founded in 2010,
formerly had its principal place of business in Pompano Beach, Florida.  In June 2022, Stimwave
filed for Chapter 11 bankruptcy protection in bankruptcy court in Delaware.  Stimwave is in the
process of winding down its business after selling substantially all of its assets pursuant to an
auction and sales process approved by the bankruptcy court in September 2022.
FACTS
I. Stimwave’s PNS Device and Business Model
15. Perryman co-founded Stimwave in 2010 to develop, manufacture, and sell
neurostimulation devices used to treat chronic pain by utilizing electrical currents to block pain
signals from reaching the brain.

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16. During all times relevant to this complaint, Perryman directed and controlled all
important aspects of Stimwave’s operations, product design, finances, and investor relations.
17. By the start of the Series D Funding in 2018, the PNS Device was one of the
Company’s main products.  The PNS Device targeted peripheral nerves located away from the
spinal cord and in smaller parts of the body, such as elbows and feet.  The PNS Device consisted
of three key components: (1) an external transmitter powered by a battery; (2) an implanted
receiver; and (3) an implanted electrode array, also referred to as a lead.  The transmitter and
battery were packaged in a wearable pouch and sent a wireless signal into the body.  The two
implanted components worked together to receive the signal and convert it into electrical
currents to create an electrical energy field that acted on target nerves.  The receiver was
supposed to amplify the signal from the external transmitter by helping capture and transmit the
signal to the lead, which then generated the electrical currents to stimulate a problematic nerve.
The lead itself could capture the signal from the external transmitter, but its range was limited
without the receiver.
18. Stimwave’s business model was based on selling its devices to doctors and other
healthcare providers, who would implant the devices in patients.  The doctors, in turn, obtained
reimbursements from health insurance programs for performing the implantation procedures.
For the PNS Device, Perryman and others at Stimwave informed doctors that they could bill
insurance separately for the implantation of the receiver and the implantation of the lead.  The
reimbursement rates were approximately $16,000 to $18,000 for the receiver, and approximately
$4,000 to $6,000 for the lead, which resulted in a total reimbursement ranging from about
$20,000 to $24,000.  Given these reimbursement rates, Stimwave generally sold its baseline PNS
Device at or around $16,000, with the final prices ranging from approximately $12,000 to over
$21,000 depending on the customer and the inclusion of add-on components.

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II. Perryman Directed Stimwave Employees to Develop a Fake Receiver That Served
No Medical Purpose.
19. The original version of the PNS Device included a single, functional receiver,
which had a copper core and was encased in plastic (the “Functional Receiver”).  In August
2017, the FDA cleared the original device for commercial distribution.
20. Not long after the original PNS Device was released for sale, doctors complained
to Stimwave that the Functional Receiver was too long to implant in certain small spaces in the
body.  Because the Functional Receiver had a copper core, it could not be cut down.
21. Perryman understood that doctors’ concerns over the size of the Functional
Receiver threatened Stimwave’s ability to maintain its existing pricing for the PNS Device.
Because the reimbursement rates for implanting only the lead were approximately $4,000 to
$6,000, it would not be economically viable for doctors to purchase the PNS Device if there was
a risk that they might not be able to implant and get reimbursed for the Functional Receiver.
22. In response, Perryman directed Stimwave employees to create the Fake Receiver,
which was smaller than the Functional Receiver and could be trimmed down even further
because it was solely a piece of plastic.  Perryman reviewed and approved internal design
documents that made clear the Fake Receiver was nothing more than a cylindrical piece of
medical-grade plastic, without copper or any other functioning parts.
23. At Perryman’s direction, both the Functional Receiver and the Fake Receiver
were included as part of the PNS Device beginning in or about spring 2018.  Stimwave did not
submit this modification of the original PNS Device to the FDA for approval.
24. Even though Perryman knew, or was reckless in not knowing, that the Fake
Receiver was not functional and served no medical purpose, she encouraged, and directed
Stimwave employees to encourage, doctors to implant the Fake Receiver whenever the space in a
patient’s body near the target nerves was too small to fit the Functional Receiver.  Perryman also
encouraged, and directed her employees to encourage, doctors to bill health insurance programs
for implanting the Fake Receiver.

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25. Perryman did not inform doctors that the Fake Receiver was not functional.  As a
result, she caused doctors and other medical providers to unwittingly submit fraudulent claims
for health insurance reimbursements between 2018 and 2020 for performing unnecessary
surgeries to implant useless plastic components into patients’ bodies.
III. Perryman Misled Investors About the PNS Device and Stimwave’s Business Model
During the Company’s Series D Funding Round.
26. Perryman actively promoted the Series D Funding and served as the main point of
contact for investors.  She personally participated in several in-person site visits as well as
presentations, phone calls, and e-mail communications with prospective investors.  Perryman
also created and/or signed off on all written Series D Funding materials, including pitch decks
and unaudited financials.  The offering raised approximately $41 million between April 2018 and
July 2019 from 10 investors who purchased shares of Stimwave’s Series D Preferred Stock.
27. The Series D Funding was particularly important for ensuring the Company had
cash on hand at that time.  For example, in 2018, the Company reported a net operating loss of
nearly $20 million and would have ended the year with a negative cash flow without the influx
of investor funds raised during the Series D Funding.  Instead, because of the funds that
Perryman raised based on misrepresentations, the Company ended the year with approximately
$6.7 million in cash.  Then, in the first half of 2019, Perryman provided investors with false and
misleading financial projections for the year that concealed the fact that Stimwave would run out
of cash by around January 2020 without additional liquidity.
28.  During the Series D Funding, pitch decks and other written materials that
Perryman approved and provided to investors explained that the PNS Device could be implanted
in small spaces in the body because it did not require a bulky implanted battery and instead relied
on an implanted receiver and lead to capture an external signal and create electrical currents for
the target nerves.  However, Perryman knew, or was reckless in not knowing, the fact that one of
the two receivers included with the supposedly groundbreaking PNS Device was, in truth, fake
and served no function, and that Fake Receivers were being implanted in patients’ bodies

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through medically unnecessary surgical procedures.  Still, Perryman falsely touted Stimwave’s
PNS Device as the only effective peripheral nerve stimulation device on the market that would
quickly make up a majority of Stimwave’s revenue and drive future growth.
29. Perryman also misrepresented to investors that the PNS Device, which already
included the Fake Receiver during the Series D Funding, had been FDA approved.  As described
above, the FDA only cleared the original version of the PNS Device that had the single
Functional Receiver.  Perryman knew, or was reckless in not knowing, that Stimwave never
submitted its modification of the original PNS Device to the FDA for review, and that, as a
result, the version of the PNS Device with the Fake Receiver had never been approved by the
FDA for commercial sale.
30. Perryman also gave investors the false and misleading impression that Stimwave
had a reliable business model that depended on its customers obtaining health insurance
reimbursements, which is a well-established source of revenues in the healthcare industry.
Perryman told investors that doctors were reliably obtaining reimbursements totaling around
$20,000 to $24,000 for implanting the lead and the receiver, and, as a consequence, Stimwave
was able to charge doctors approximately $16,000 for the PNS Device.  However, as explained
above, Perryman knew, or was reckless in not knowing, that the Fake Receiver was included
with the PNS Device and that some doctors were unwittingly submitting fraudulent
reimbursement claims for implanting a non-functional piece of plastic into patients.  Once
doctors and insurance programs learned the truth about the Fake Receiver, doctors would stop
implanting the fake component and likely stop buying Stimwave’s PNS Devices all together, and
insurance programs would stop paying reimbursements for the implantation procedures for the
PNS Devices.
31. Perryman’s misrepresentations and other deceptive conduct regarding the PNS
Device and Stimwave’s business model were important to investors because they were directly
related to the viability of Stimwave’s business and, therefore, the likelihood that investors would
obtain a return on their investments in the Company.

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IV. Perryman Also Made Misrepresentations to Investors About Stimwave’s Revenues
and Revenue Projections, Which Came to Light When Her Fraud Unraveled.
32. Perryman also provided investors with false and misleading information about the
revenues that Stimwave had earned from sales of its devices as well as the projected revenues
that it was expecting in the future.  Investor materials and financial statements sent to investors
by Perryman included revenue numbers that were significantly overstated.
33. During all times relevant to this complaint, Perryman controlled and managed key
aspects of Stimwave’s financial statements and sales records.  She had her own password to
personally input financial information into the Company’s bookkeeping software, which was
used to keep track of revenues and cash flow numbers.  She also personally interacted with the
doctors and medical practices that bought Stimwave’s products, and even signed sales contracts
that set forth the negotiated prices each customer had agreed to pay.
34. In the fall of 2019, Perryman came under increasing pressure from Stimwave’s
Board to professionalize the Company’s accounting and finance departments, which Perryman
largely ran by herself.  In addition, in or around October 2019, Stimwave received a civil
investigative demand for documents from the U.S. Attorney’s Office for the Southern District of
New York in connection with an investigation of the Company.
35. Around the same time, Perryman admitted to the Board that she had been
overstating the Company’s revenues.  For example, when Stimwave made a sale of its products,
Perryman would at times record in its books the higher list prices of Stimwave devices rather
than the lower, negotiated contract prices.  Because Perryman signed the sales contracts, she
knew, or was reckless in not knowing, that the negotiated prices were less than the list prices.
36. In the wake of these revelations from Perryman, the Stimwave Board initiated an
internal investigation of the Company’s operations and its finances, and Perryman resigned
shortly thereafter from her position as CEO in November 2019.  The internal investigation
concluded, among other things, that, in 2018 and 2019, Perryman had misdirected Company
funds to her personal bank accounts totaling more than $1.2 million beyond the salary and

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bonuses she was entitled to under her compensation arrangement.  The investigation also found
that the Company’s revenues for 2018, which Perryman had previously reported internally and to
investors as being approximately $34 million, were in reality closer to about $22 million.
Furthermore, the investigation determined that Perryman had significantly overstated
Stimwave’s revenues for the first half of 2019 and revenue projections for the rest of the year,
both of which were shared with at least certain Series D Funding investors.
37. Perryman knew, or was reckless in not knowing, that the Stimwave revenue
figures that she provided to investors were false and misleading at least in part because she had
personally improperly recorded higher revenue figures based on Stimwave devices’ list prices in
the Company’s accounting records when those devices had in fact been sold for lower negotiated
prices.
38. Perryman’s misrepresentations and other deceptive conduct regarding Stimwave’s
finances were important to investors because they were directly related to the viability of
Stimwave’s business and, therefore, the likelihood that investors would obtain a return on their
investments in the Company.
39. In July 2020, Stimwave, in coordination with the FDA, announced a voluntary
recall of all its PNS Devices that contained the Fake Receiver, which covered approximately
5,600 devices.  Then, in June 2022, Stimwave filed a Chapter 11 bankruptcy petition.  In
September 2022, the bankruptcy court approved a sale of substantially all of Stimwave’s assets.
Following that sale, Stimwave has been winding down its business.
FIRST CLAIM FOR RELIEF
(Violations of Section 10(b) of the Exchange Act and Rule 10b-5)
40. The Commission realleges and incorporates by reference paragraphs 1 through
39.
41.  Perryman, by engaging in the conduct described above, directly or indirectly, in
connection with the purchase or sale of securities, by use of means or instrumentalities of
interstate commerce, or of the mails, with scienter:

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a. Employed devices, schemes, or artifices to defraud;
b. Made untrue statements of material facts or omitted to state material
facts necessary in order to make the statements made, in the light of the
circumstances under which they were made, not misleading; and
c. Engaged in acts, practices, or courses of business which operated or
would operate as a fraud or deceit upon other persons, including
purchasers of securities.
42. By reason of the foregoing, Perryman violated, and unless restrained and enjoined
will continue to violate, Section 10(b) of the Exchange Act [15 U.S.C. § 78j(b)] and Rule 10b-5
thereunder [17 C.F.R. § 240.10b-5].
SECOND CLAIM FOR RELIEF
(Violations of Section 17(a) of the Securities Act)
43. The Commission realleges and incorporates by reference paragraphs 1 through
39.
44. Perryman, by engaging in the conduct described above, directly or indirectly, in
the offer or sale of securities, by use of the means of instruments of transportation or
communication in interstate commerce or by use of the mails:
a. with scienter, employed devices, schemes, or artifices to defraud;
b. obtained money or property by means of untrue statements of material
fact or by omitting to state a material fact necessary in order to make the
statements made, in light of the circumstances under which they were
made, not misleading; and
c. engaged in transactions, practices, or courses of business which operated
or would operate as a fraud or deceit upon purchasers.
45. By reason of the foregoing, Perryman violated, and unless restrained and enjoined
will continue to violate, Section 17(a) of the Securities Act [15 U.S.C. § 77q(a)].

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PRAYER FOR RELIEF
WHEREFORE, the Commission respectfully requests that the Court:
I.
Enter an order permanently enjoining Perryman from directly or indirectly violating
Section 10(b) of the Exchange Act [15 U.S.C. § 78j(b)] and Rule 10b-5 [17 C.F.R. § 240.10b-5]
thereunder, and Section 17(a) of the Securities Act [15 U.S.C. § 77q(a)].
II.
Enter an order permanently enjoining Perryman from directly or indirectly, including, but
not limited to, through any entity owned or controlled by her, participating in the issuance,
purchase, offer, or sale of any security, provided, however, that such injunction shall not prevent
Perryman from purchasing or selling securities for her own personal accounts, pursuant to
Section 20(b) of the Securities Act [15 U.S.C. § 77t(b)] and Sections 21(d)(1) and 21(d)(5) of the
Exchange Act [15 U.S.C. §§ 78u(d)(1) and 78u(d)(5)].
III.
Enter an order requiring Perryman to disgorge all ill-gotten gains received as a result of
her unlawful conduct plus prejudgment interest thereon, pursuant to Sections 21(d)(3), 21(d)(5),
and 21(d)(7) of the Exchange Act [15 U.S.C. §§ 78u(d)(3), 78u(d)(5), and 78u(d)(7)].
IV.
Enter an order requiring Perryman to pay civil money penalties pursuant to Section 20(d)
of the Securities Act [15 U.S.C. § 77t(d)] and Section 21(d)(3) of the Exchange Act [15 U.S.C. §
78u(d)(3)].
V.
Enter an order prohibiting Perryman from serving as an officer or director of any issuer
having a class of securities registered with the Commission pursuant to Section 12 of the
Exchange Act [15 U.S.C. § 78l] or that is required to file reports pursuant to Section 15(d) of the
Exchange Act [15 U.S.C. § 78o(d)], pursuant to Section 20(e) of the Securities Act [15 U.S.C. §
77t(e)] and Section 21(d)(2) of the Exchange Act [15 U.S.C. § 78u(d)(2)].

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VI.
Retain jurisdiction of this action in accordance with the principles of equity and the
Federal Rules of Civil Procedure in order to implement and carry out the terms of all orders and
decrees that may be entered, or to entertain any suitable application or motion for additional
relief within the jurisdiction of this Court.
VII.
Grant such other and further relief as this Court may determine to be just and necessary.
JURY DEMAND
The Commission demands a trial by jury.

Dated: December 19, 2023
Respectfully submitted,

________________________________________
Yoona Kim
Attorney for Plaintiff
SECURITIES AND EXCHANGE COMMISSION

1 

 

MONIQUE C. WINKLER  
JASON H. LEE 
DAVID ZHOU  
MARC D. KATZ  
YOONA KIM  
Attorneys for Plaintiff 
SECURITIES AND EXCHANGE 
COMMISSION 
San Francisco Regional Office  
44 Montgomery Street, Suite 2800 
San Francisco, CA 94104 
Telephone: (415) 705-2500 
Facsimile: (415) 705-2501 
Email: [email protected]; [email protected] 

 

UNITED STATES DISTRICT COURT 

SOUTHERN DISTRICT OF NEW YORK 

SECURITIES AND EXCHANGE 
COMMISSION, 

Plaintiff, 

 v. 

LAURA TYLER PERRYMAN,  

Defendant. 

 

COMPLAINT 

1:23-cv-10985 

 

JURY TRIAL DEMANDED 

Plaintiff Securities and Exchange Commission (the “Commission”), for its complaint 

against Laura Tyler Perryman (“Perryman”), alleges as follows: 

SUMMARY 

1. From April 2018 through July 2019, Perryman fraudulently raised approximately 

$41 million for Stimwave Technologies Incorporated, a privately held medical device startup 

formerly based in Pompano Beach, Florida (“Stimwave” or the “Company”) that Perryman co-

founded in December 2010 and led as its then-Chief Executive Officer.   

2. Specifically, during Stimwave’s Series D funding round (the “Series D Funding”), 

Perryman made materially false and misleading statements to investors about one of Stimwave’s 

key products, a neurostimulation device system that used electrical currents to treat chronic pain 

in peripheral nerves away from the spinal cord (the “PNS Device”).  Perryman knew, or was 

Case 1:23-cv-10985   Document 1   Filed 12/19/23   Page 1 of 13



 

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reckless in not knowing, that a primary component of the PNS Device—a receiver implanted 

inside patients’ bodies to help capture and amplify electrical signals—was, in reality, a fake, 

non-functional piece of plastic (the “Fake Receiver”).  Indeed, Perryman directed and approved 

the creation of the Fake Receiver to include as part of the PNS Device so that doctors, who 

purchased the PNS Devices and unwittingly implanted the Fake Receiver in patients, could 

obtain significant reimbursement amounts from health insurance programs.  Those 

reimbursements made it possible for Stimwave to charge doctors higher prices for the PNS 

Devices compared to the devices without a receiver.   

3. Perryman misleadingly told investors that the PNS Device was the only effective 

peripheral nerve stimulation device on the market, and that the PNS Device, which included the 

Fake Receiver, had been approved by the U.S. Food and Drug Administration (“FDA”), which 

regulates medical devices.  In fact, the Fake Receiver was never cleared by the FDA. 

4. Perryman also made numerous misrepresentations that gave investors the false 

and misleading impression that the Company’s products and its business model, which depended 

on health insurance reimbursements to doctors for device implantation procedures, would 

generate reliable revenue.  In addition, Perryman overstated Stimwave’s historical revenues and 

revenue projections to investors.  

5. Perryman was the Company’s main point of contact for investors during the 

Series D Funding.  Investors invested millions of dollars in Stimwave based on her 

misrepresentations.  

6. Perryman resigned as CEO in November 2019 after, among other things, her role 

in the inflation of Stimwave’s historical revenues came to light.  Stimwave eventually initiated a 

voluntary recall of all its PNS Devices in July 2020.  The Company subsequently filed for 

Chapter 11 bankruptcy protection in June 2022, sold most of its assets, and ceased its operations. 

7. By her actions, Perryman violated the antifraud provisions of the federal securities 

laws, specifically Section 10(b) of the Securities Exchange Act of 1934 (“Exchange Act”) [15 

Case 1:23-cv-10985   Document 1   Filed 12/19/23   Page 2 of 13



 

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U.S.C. § 78j(b)] and Rule 10b-5 thereunder [17 C.F.R. § 240.10b-5], and Section 17(a) of the 

Securities Act of 1933 (“Securities Act”) [15 U.S.C. § 77q(a)]. 

NATURE OF THE PROCEEDINGS AND RELIEF SOUGHT 

8. The Commission brings this action pursuant to the authority conferred upon it by 

Sections 20(b), 20(d), and 22(a) of the Securities Act [15 U.S.C. §§ 77t(b), 77t(d), and 77v(a)], 

and Sections 21(d), 21(e), and 27 of the Exchange Act [15 U.S.C. §§ 78u(d), 78u(e), and 78aa].   

9. The Commission seeks a final judgment: (a) permanently enjoining Perryman 

from violating the federal securities laws and rules that this complaint alleges she has violated; 

(b) permanently enjoining Perryman from, directly or indirectly, including, but not limited to, 

through any entity owned or controlled by her, participating in the issuance, purchase, offer, or 

sale of any security, provided, however, that such injunction shall not prevent Perryman from 

purchasing or selling securities for her own personal accounts, pursuant to Section 20(b) of the 

Securities Act [15 U.S.C. § 77t(b)] and Sections 21(d)(1) and 21(d)(5) of the Exchange Act [15 

U.S.C. §§ 78u(d)(1) and 78u(d)(5)]; (c) ordering Perryman to pay disgorgement with 

prejudgment interest, pursuant to Sections 21(d)(3), 21(d)(5), and 21(d)(7) of the Exchange Act 

[15 U.S.C. §§ 78u(d)(3), 78u(d)(5), and 78u(d)(7)]; (d) ordering Perryman to pay civil money 

penalties pursuant to Section 20(d) of the Securities Act [15 U.S.C. § 77t(d)] and Section 

21(d)(3) of the Exchange Act [15 U.S.C. § 78u(d)(3)]; (e) prohibiting Perryman from serving as 

an officer or director of any company that has a class of securities registered under Section 12 of 

the Exchange Act [15 U.S.C. § 78l] or that is required to file reports under Section 15(d) of the 

Exchange Act [15 U.S.C. § 78o(d)], pursuant to Section 20(e) of the Securities Act [15 U.S.C. § 

77t(e)] and Section 21(d)(2) of the Exchange Act [15 U.S.C. § 78u(d)(2)]; and (f) ordering any 

other and further relief the Court may deem just and proper. 

JURISDICTION AND VENUE 

10. This Court has jurisdiction over this action pursuant to Sections 20(b), 20(d), 

20(e), and 22(a) of the Securities Act [15 U.S.C. §§ 77t(b), 77t(d), 77t(e), and 77v(a)] and 

Sections 21(d), 21(e), and 27 of the Exchange Act [15 U.S.C. §§ 78u(d), 78u(e), and 78aa]. 

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11. Perryman, directly or indirectly, made use of the means and instruments of 

interstate commerce or of the mails in connection with the acts, transactions, practices, and 

courses of business alleged in this complaint.  

12. Venue is proper in this District pursuant to Section 22(a) of the Securities Act [15 

U.S.C. § 77v(a)] and Section 27(a) of the Exchange Act [15 U.S.C. § 78aa(a)].  Acts, 

transactions, practices, and courses of business that form the basis for the violations alleged in 

this complaint occurred in this District.  For example, Stimwave offered and sold securities in 

this District, including to an investor in the Series D Funding who is based in this District; 

Stimwave solicited and sold its devices to doctors and medical practices located in this District; 

and Stimwave caused medical providers to seek reimbursement from health insurance programs 

for implanting Stimwave devices in residents of this District.       

DEFENDANT 

13. Laura Tyler Perryman, age 55, is a resident of Delray Beach, Florida.  

Perryman co-founded Stimwave in December 2010 and served as CEO through November 2019, 

when she resigned.  Perryman also served as a director and co-Chair of the Stimwave Board of 

Directors.  

RELATED ENTITY 

14. Stimwave Technologies Incorporated, a Delaware corporation founded in 2010, 

formerly had its principal place of business in Pompano Beach, Florida.  In June 2022, Stimwave 

filed for Chapter 11 bankruptcy protection in bankruptcy court in Delaware.  Stimwave is in the 

process of winding down its business after selling substantially all of its assets pursuant to an 

auction and sales process approved by the bankruptcy court in September 2022.  

FACTS 

I. Stimwave’s PNS Device and Business Model 

15. Perryman co-founded Stimwave in 2010 to develop, manufacture, and sell 

neurostimulation devices used to treat chronic pain by utilizing electrical currents to block pain 

signals from reaching the brain.   

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16. During all times relevant to this complaint, Perryman directed and controlled all 

important aspects of Stimwave’s operations, product design, finances, and investor relations.  

17. By the start of the Series D Funding in 2018, the PNS Device was one of the 

Company’s main products.  The PNS Device targeted peripheral nerves located away from the 

spinal cord and in smaller parts of the body, such as elbows and feet.  The PNS Device consisted 

of three key components: (1) an external transmitter powered by a battery; (2) an implanted 

receiver; and (3) an implanted electrode array, also referred to as a lead.  The transmitter and 

battery were packaged in a wearable pouch and sent a wireless signal into the body.  The two 

implanted components worked together to receive the signal and convert it into electrical 

currents to create an electrical energy field that acted on target nerves.  The receiver was 

supposed to amplify the signal from the external transmitter by helping capture and transmit the 

signal to the lead, which then generated the electrical currents to stimulate a problematic nerve.  

The lead itself could capture the signal from the external transmitter, but its range was limited 

without the receiver. 

18. Stimwave’s business model was based on selling its devices to doctors and other 

healthcare providers, who would implant the devices in patients.  The doctors, in turn, obtained 

reimbursements from health insurance programs for performing the implantation procedures.  

For the PNS Device, Perryman and others at Stimwave informed doctors that they could bill 

insurance separately for the implantation of the receiver and the implantation of the lead.  The 

reimbursement rates were approximately $16,000 to $18,000 for the receiver, and approximately 

$4,000 to $6,000 for the lead, which resulted in a total reimbursement ranging from about 

$20,000 to $24,000.  Given these reimbursement rates, Stimwave generally sold its baseline PNS 

Device at or around $16,000, with the final prices ranging from approximately $12,000 to over 

$21,000 depending on the customer and the inclusion of add-on components.   

 

 

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II. Perryman Directed Stimwave Employees to Develop a Fake Receiver That Served 

No Medical Purpose. 

19. The original version of the PNS Device included a single, functional receiver, 

which had a copper core and was encased in plastic (the “Functional Receiver”).  In August 

2017, the FDA cleared the original device for commercial distribution.  

20. Not long after the original PNS Device was released for sale, doctors complained 

to Stimwave that the Functional Receiver was too long to implant in certain small spaces in the 

body.  Because the Functional Receiver had a copper core, it could not be cut down.  

21. Perryman understood that doctors’ concerns over the size of the Functional 

Receiver threatened Stimwave’s ability to maintain its existing pricing for the PNS Device.  

Because the reimbursement rates for implanting only the lead were approximately $4,000 to 

$6,000, it would not be economically viable for doctors to purchase the PNS Device if there was 

a risk that they might not be able to implant and get reimbursed for the Functional Receiver. 

22. In response, Perryman directed Stimwave employees to create the Fake Receiver, 

which was smaller than the Functional Receiver and could be trimmed down even further 

because it was solely a piece of plastic.  Perryman reviewed and approved internal design 

documents that made clear the Fake Receiver was nothing more than a cylindrical piece of 

medical-grade plastic, without copper or any other functioning parts.   

23. At Perryman’s direction, both the Functional Receiver and the Fake Receiver 

were included as part of the PNS Device beginning in or about spring 2018.  Stimwave did not 

submit this modification of the original PNS Device to the FDA for approval.  

24. Even though Perryman knew, or was reckless in not knowing, that the Fake 

Receiver was not functional and served no medical purpose, she encouraged, and directed 

Stimwave employees to encourage, doctors to implant the Fake Receiver whenever the space in a 

patient’s body near the target nerves was too small to fit the Functional Receiver.  Perryman also 

encouraged, and directed her employees to encourage, doctors to bill health insurance programs 

for implanting the Fake Receiver.    

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25. Perryman did not inform doctors that the Fake Receiver was not functional.  As a 

result, she caused doctors and other medical providers to unwittingly submit fraudulent claims 

for health insurance reimbursements between 2018 and 2020 for performing unnecessary 

surgeries to implant useless plastic components into patients’ bodies.    

III. Perryman Misled Investors About the PNS Device and Stimwave’s Business Model 

During the Company’s Series D Funding Round. 

26. Perryman actively promoted the Series D Funding and served as the main point of 

contact for investors.  She personally participated in several in-person site visits as well as 

presentations, phone calls, and e-mail communications with prospective investors.  Perryman 

also created and/or signed off on all written Series D Funding materials, including pitch decks 

and unaudited financials.  The offering raised approximately $41 million between April 2018 and 

July 2019 from 10 investors who purchased shares of Stimwave’s Series D Preferred Stock. 

27. The Series D Funding was particularly important for ensuring the Company had 

cash on hand at that time.  For example, in 2018, the Company reported a net operating loss of 

nearly $20 million and would have ended the year with a negative cash flow without the influx 

of investor funds raised during the Series D Funding.  Instead, because of the funds that 

Perryman raised based on misrepresentations, the Company ended the year with approximately 

$6.7 million in cash.  Then, in the first half of 2019, Perryman provided investors with false and 

misleading financial projections for the year that concealed the fact that Stimwave would run out 

of cash by around January 2020 without additional liquidity.   

28.  During the Series D Funding, pitch decks and other written materials that 

Perryman approved and provided to investors explained that the PNS Device could be implanted 

in small spaces in the body because it did not require a bulky implanted battery and instead relied 

on an implanted receiver and lead to capture an external signal and create electrical currents for 

the target nerves.  However, Perryman knew, or was reckless in not knowing, the fact that one of 

the two receivers included with the supposedly groundbreaking PNS Device was, in truth, fake 

and served no function, and that Fake Receivers were being implanted in patients’ bodies 

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through medically unnecessary surgical procedures.  Still, Perryman falsely touted Stimwave’s 

PNS Device as the only effective peripheral nerve stimulation device on the market that would 

quickly make up a majority of Stimwave’s revenue and drive future growth.   

29. Perryman also misrepresented to investors that the PNS Device, which already 

included the Fake Receiver during the Series D Funding, had been FDA approved.  As described 

above, the FDA only cleared the original version of the PNS Device that had the single 

Functional Receiver.  Perryman knew, or was reckless in not knowing, that Stimwave never 

submitted its modification of the original PNS Device to the FDA for review, and that, as a 

result, the version of the PNS Device with the Fake Receiver had never been approved by the 

FDA for commercial sale.   

30. Perryman also gave investors the false and misleading impression that Stimwave 

had a reliable business model that depended on its customers obtaining health insurance 

reimbursements, which is a well-established source of revenues in the healthcare industry.  

Perryman told investors that doctors were reliably obtaining reimbursements totaling around 

$20,000 to $24,000 for implanting the lead and the receiver, and, as a consequence, Stimwave 

was able to charge doctors approximately $16,000 for the PNS Device.  However, as explained 

above, Perryman knew, or was reckless in not knowing, that the Fake Receiver was included 

with the PNS Device and that some doctors were unwittingly submitting fraudulent 

reimbursement claims for implanting a non-functional piece of plastic into patients.  Once 

doctors and insurance programs learned the truth about the Fake Receiver, doctors would stop 

implanting the fake component and likely stop buying Stimwave’s PNS Devices all together, and 

insurance programs would stop paying reimbursements for the implantation procedures for the 

PNS Devices.  

31. Perryman’s misrepresentations and other deceptive conduct regarding the PNS 

Device and Stimwave’s business model were important to investors because they were directly 

related to the viability of Stimwave’s business and, therefore, the likelihood that investors would 

obtain a return on their investments in the Company. 

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IV. Perryman Also Made Misrepresentations to Investors About Stimwave’s Revenues 

and Revenue Projections, Which Came to Light When Her Fraud Unraveled. 

32. Perryman also provided investors with false and misleading information about the 

revenues that Stimwave had earned from sales of its devices as well as the projected revenues 

that it was expecting in the future.  Investor materials and financial statements sent to investors 

by Perryman included revenue numbers that were significantly overstated.  

33. During all times relevant to this complaint, Perryman controlled and managed key 

aspects of Stimwave’s financial statements and sales records.  She had her own password to 

personally input financial information into the Company’s bookkeeping software, which was 

used to keep track of revenues and cash flow numbers.  She also personally interacted with the 

doctors and medical practices that bought Stimwave’s products, and even signed sales contracts 

that set forth the negotiated prices each customer had agreed to pay. 

34. In the fall of 2019, Perryman came under increasing pressure from Stimwave’s 

Board to professionalize the Company’s accounting and finance departments, which Perryman 

largely ran by herself.  In addition, in or around October 2019, Stimwave received a civil 

investigative demand for documents from the U.S. Attorney’s Office for the Southern District of 

New York in connection with an investigation of the Company.   

35. Around the same time, Perryman admitted to the Board that she had been 

overstating the Company’s revenues.  For example, when Stimwave made a sale of its products, 

Perryman would at times record in its books the higher list prices of Stimwave devices rather 

than the lower, negotiated contract prices.  Because Perryman signed the sales contracts, she 

knew, or was reckless in not knowing, that the negotiated prices were less than the list prices. 

36. In the wake of these revelations from Perryman, the Stimwave Board initiated an 

internal investigation of the Company’s operations and its finances, and Perryman resigned 

shortly thereafter from her position as CEO in November 2019.  The internal investigation 

concluded, among other things, that, in 2018 and 2019, Perryman had misdirected Company 

funds to her personal bank accounts totaling more than $1.2 million beyond the salary and 

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bonuses she was entitled to under her compensation arrangement.  The investigation also found 

that the Company’s revenues for 2018, which Perryman had previously reported internally and to 

investors as being approximately $34 million, were in reality closer to about $22 million.  

Furthermore, the investigation determined that Perryman had significantly overstated 

Stimwave’s revenues for the first half of 2019 and revenue projections for the rest of the year, 

both of which were shared with at least certain Series D Funding investors.   

37. Perryman knew, or was reckless in not knowing, that the Stimwave revenue 

figures that she provided to investors were false and misleading at least in part because she had 

personally improperly recorded higher revenue figures based on Stimwave devices’ list prices in 

the Company’s accounting records when those devices had in fact been sold for lower negotiated 

prices.    

38. Perryman’s misrepresentations and other deceptive conduct regarding Stimwave’s 

finances were important to investors because they were directly related to the viability of 

Stimwave’s business and, therefore, the likelihood that investors would obtain a return on their 

investments in the Company. 

39. In July 2020, Stimwave, in coordination with the FDA, announced a voluntary 

recall of all its PNS Devices that contained the Fake Receiver, which covered approximately 

5,600 devices.  Then, in June 2022, Stimwave filed a Chapter 11 bankruptcy petition.  In 

September 2022, the bankruptcy court approved a sale of substantially all of Stimwave’s assets.  

Following that sale, Stimwave has been winding down its business.  

FIRST CLAIM FOR RELIEF 

(Violations of Section 10(b) of the Exchange Act and Rule 10b-5) 

40. The Commission realleges and incorporates by reference paragraphs 1 through 

39. 

41.  Perryman, by engaging in the conduct described above, directly or indirectly, in 

connection with the purchase or sale of securities, by use of means or instrumentalities of 

interstate commerce, or of the mails, with scienter: 

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a. Employed devices, schemes, or artifices to defraud; 

b. Made untrue statements of material facts or omitted to state material 

facts necessary in order to make the statements made, in the light of the 

circumstances under which they were made, not misleading; and 

c. Engaged in acts, practices, or courses of business which operated or 

would operate as a fraud or deceit upon other persons, including 

purchasers of securities. 

42. By reason of the foregoing, Perryman violated, and unless restrained and enjoined 

will continue to violate, Section 10(b) of the Exchange Act [15 U.S.C. § 78j(b)] and Rule 10b-5 

thereunder [17 C.F.R. § 240.10b-5]. 

SECOND CLAIM FOR RELIEF 

(Violations of Section 17(a) of the Securities Act) 

43. The Commission realleges and incorporates by reference paragraphs 1 through 

39. 

44. Perryman, by engaging in the conduct described above, directly or indirectly, in 

the offer or sale of securities, by use of the means of instruments of transportation or 

communication in interstate commerce or by use of the mails: 

a. with scienter, employed devices, schemes, or artifices to defraud; 

b. obtained money or property by means of untrue statements of material 

fact or by omitting to state a material fact necessary in order to make the 

statements made, in light of the circumstances under which they were 

made, not misleading; and 

c. engaged in transactions, practices, or courses of business which operated 

or would operate as a fraud or deceit upon purchasers. 

45. By reason of the foregoing, Perryman violated, and unless restrained and enjoined 

will continue to violate, Section 17(a) of the Securities Act [15 U.S.C. § 77q(a)]. 

 

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PRAYER FOR RELIEF 

WHEREFORE, the Commission respectfully requests that the Court:   

I. 

Enter an order permanently enjoining Perryman from directly or indirectly violating 

Section 10(b) of the Exchange Act [15 U.S.C. § 78j(b)] and Rule 10b-5 [17 C.F.R. § 240.10b-5] 

thereunder, and Section 17(a) of the Securities Act [15 U.S.C. § 77q(a)]. 

II. 

Enter an order permanently enjoining Perryman from directly or indirectly, including, but 

not limited to, through any entity owned or controlled by her, participating in the issuance, 

purchase, offer, or sale of any security, provided, however, that such injunction shall not prevent 

Perryman from purchasing or selling securities for her own personal accounts, pursuant to 

Section 20(b) of the Securities Act [15 U.S.C. § 77t(b)] and Sections 21(d)(1) and 21(d)(5) of the 

Exchange Act [15 U.S.C. §§ 78u(d)(1) and 78u(d)(5)]. 

III. 

Enter an order requiring Perryman to disgorge all ill-gotten gains received as a result of 

her unlawful conduct plus prejudgment interest thereon, pursuant to Sections 21(d)(3), 21(d)(5), 

and 21(d)(7) of the Exchange Act [15 U.S.C. §§ 78u(d)(3), 78u(d)(5), and 78u(d)(7)]. 

IV. 

Enter an order requiring Perryman to pay civil money penalties pursuant to Section 20(d) 

of the Securities Act [15 U.S.C. § 77t(d)] and Section 21(d)(3) of the Exchange Act [15 U.S.C. § 

78u(d)(3)]. 

V. 

Enter an order prohibiting Perryman from serving as an officer or director of any issuer 

having a class of securities registered with the Commission pursuant to Section 12 of the 

Exchange Act [15 U.S.C. § 78l] or that is required to file reports pursuant to Section 15(d) of the 

Exchange Act [15 U.S.C. § 78o(d)], pursuant to Section 20(e) of the Securities Act [15 U.S.C. § 

77t(e)] and Section 21(d)(2) of the Exchange Act [15 U.S.C. § 78u(d)(2)]. 

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VI. 

Retain jurisdiction of this action in accordance with the principles of equity and the 

Federal Rules of Civil Procedure in order to implement and carry out the terms of all orders and 

decrees that may be entered, or to entertain any suitable application or motion for additional 

relief within the jurisdiction of this Court. 

VII. 

Grant such other and further relief as this Court may determine to be just and necessary. 

JURY DEMAND 

The Commission demands a trial by jury. 

 

Dated: December 19, 2023        

Respectfully submitted, 

 

 

________________________________________   
Yoona Kim  
Attorney for Plaintiff 
SECURITIES AND EXCHANGE COMMISSION 

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