SEC charges ex-medtech CEO with fraud for selling plastic fake implants

The CEO of a now-bankrupt medical technology supplier has been charged for a second time with crimes connected to the development of a "non-functional piece of plastic" implanted in patients to keep up the appearance of profitability. Laura Tyler Perryman, founder and CEO of Stimwave, was yesterday charged by the US Securities …

[Mike 137]

Sound business principles

"you can't get away with such malfeasance when millions of investor dollars are on the line, which is why the SEC has stepped in - not because doctors and patients were defrauded into placing fake implants."

It's nice to see they had their priorities right -- the money's what matters, sod the patients. And actually that's the way the UK NHS seems to be going too.

[Doctor Syntax]

Re: Sound business principles

The March case referred to in the article refers to the criminal case for fraud and the $10million was "to avoid prosecution" in relation to that one report. I'd like to think that the actual victims would be first in line for compensation before the state gets its hands on whatever amount of money might actually be available (the corporation declared bankruptcy) but I somehow doubt it.

[ecofeco]

Re: Sound business principles

American society decrees you must die for Mammon, but investors are a protected class.

[John Riddoch]

Re: Sound business principles

Yup, same thing happened with Activision/Blizzard - https://www.sec.gov/news/press-release/2023-22 - Workplace bullying is fine according to the SEC, but keeping schtum to investors about your staff leaving because of it is absolutely not allowed.

Also Google+ having massive insecurities - SEC fined Alphabet for not advising investors of potential vulnerabilities: https://www.theregister.com/2022/03/07/supreme_court_alphabet_google_plus/

[tfewster]

Re: Sound business principles

The SEC's remit is confined to Securities fraud, it's not that they're heartless. And they can go after company officers, whereas patients can only sue the company (which promptly went bankrupt after being exposed).

It sounds like a number of employees were complicit in this scam, but I don't know what criminal charges could be brought against individual employees.

[Alan Brown]

Re: Sound business principles

Even under Delaware law, they've have to "go bankrupt" _before_ being sued in order to dodge the liabilities (and as with European law, being a LLC only shields the investors. Company officers can be individually sued for unlawful decisions, even after company dissolution)

UK readrs will be happy to note that as of February 2022, preemptively dissolving to dodge debts no longer works and investors/directors remain liable for several years after dissolution. The law was changed mostly to deal with companies folding up to avoid Covid loan repayments however it's applicable to thinghs like ICO fines, etc (if a company director is stupid enough to threaten to dissolve then action can be expedited - as at least one used car dealer has found out recently)

[biddibiddibiddibiddi]

How did it even work if they weren't implanting a functioning receiver? Did they just gaslight the doctors and patients for as long as possible when they complained it wasn't doing anything? Could they not have just made it shorter and still have a copper core, with a provision that it might not have the same power level as the full-size one maybe? Even more profit for the doctors since the implantation would still be billed at the same amount, and no reason the company would need to charge less for the smaller unit either. Small, medium or large, you're getting a device that does a thing and that's what you pay for. (The company would have to do some testing and apply for approval, so that would cost a small amount.)

[ecofeco]

Having worked for a few hospitals, it's amazing how ignorant they are of all things technical and how their hubris prevents them from ever learning.

Not ALL hospitals are like, but far too many are.

[Anonymous Coward]

Think Big.

Could have just prescribed Human Growth Hormone for the patients.

[Bebu]

Its not the fraud, its who you defraud.

If this degerate had taken Rupert's dosh he would have the suite next to lovely Liz - but no - looks like the berk will be slightly restricted from any repeat performances in the near future.

Anyone whose nearest and dearest has suffered harm or died from these futile procedures should be permitted with a baseball bat an hour or so with this prick.

[Antipode77]

Tricking someone to get an absolutely useless device implanted in their bofy should be considered a case of aggravated assault.

[yetanotheraoc]

I thought following orders wasn't a defence

"Perryman directed Stimwave employees to create the Fake Receiver..."

I might hold my nose and do some unpleasant stuff for a paycheck. But if a higher-up asked me to do something like this I would definitely be making an anonymous tip to an investigative journalist. They would just need to wait for the first fake-device delivery and ask to look at it. Irrespective of personal integrity, what about simple cause and effect? This had to come out eventually. Say something and sink the company now, or say nothing and watch the company sink more dramatically later....

[RichJustRich]

I had this implanted in my shoulder. The trial version helped but stopped working. They swore I was a great candidate and the full version would work. That was in 2022. The full version never worked and still have chronic pain. I just heard of this. Does anyone know if former patients have any rights to get it taken out or for compensation? Any lawyers or anyone else know anything or that can help.

[Philo T Farnsworth]

Placebo effect?

I have to wonder whether the "trial version" worked merely due to the placebo effect.

I also have to wonder on what basis doctors decided this was a clinically viable treatment. Did these clowns fake their clinical trials, too?

It it was just on the basis of being wined and dined by a sales rep, they ought to lose their license to practice medicine.