Zionsville medical device maker accused of violating securities law
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Indiana officials have issued a cease-and-desist order against a Zionsville medical device company and three of its officers, prohibiting them from engaging in further offers or sales of unregistered securities.
The Secretary of State’s Securities Division announced the action Tuesday against VoCare Inc. and officers Steven R. Peabody, Mary Zappia and Scott Kane.
The company and the three officers are accused of violating Indiana law by engaging in nine separate offers or sales of securities without registering the securities as required under Indiana law. In two other offerings, VoCare did submit paperwork, but it contained inaccurate or misleading information, Secretary of State Diego Morales said in written remarks.
“There is also reason to believe that VoCare Inc. has made other offerings unknown to the division,” Morales said. “At the time the cease & desist petition was filed with the Indiana securities commissioner, VoCare Inc. [was] continuing to solicit new investments. Additionally, offering materials distributed by VoCare Inc. in the form of a “business plan” and various “updates” contained false and misleading information about the state of the company and the success of its products.”
He added: “Claims were made in the business plans about the development stage of products, alleged interest in the products by outside parties, sales forecasts without any reasonable basis, and statements about manufacturing/retail arrangements that did not in fact exist. These claims were used to solicit new investments and keep money flowing into the company that was used to personally enrich the named parties.”
James Klimek, an Indianapolis attorney representing the respondents, told IBJ his clients did not violate Indiana law and said they intend to “defend themselves in this matter vigorously.” He declined to comment otherwise.
VoCare has developed a handheld gadget that allows physicians to monitor their patients’ vital signs remotely. The device won approval in 2021 from the U.S. Food and Drug Administration.
The company and its officers have been involved in civil lawsuits filed by early investors who have accused them of improperly awarding themselves millions of shares of stock at deep discounts, thus allowing themselves to entrench voting control of the company while diluting the value of the early investors’ holdings.
VoCare was founded in 2009 in Lebanon. Its corporate address is listed on its website as the Boone Village shopping center in Zionsville.