Masimo CEO shares confidential information before publication: documents
Joe Kiani, CEO, Masimo
Scott Miller | CNBC
Masimo According to court records, CEO Joe Kiani, whose health tech company is locked in a proxy battle with activist Politan, disclosed what he called confidential information to a major investor 12 hours before it was released to the public.
The documents, partially released Friday, relate to ongoing litigation between Politan and Masimo, a company that makes a device that monitors a person’s blood oxygen levels. Politan is seeking to replace two directors, including Kiani, with its own nominees at a shareholder meeting later this month.
The latest filing includes a March email from Kiani to Naveen Yalamanchi, a portfolio manager at RTW Investments, informing him of an announcement coming the following day. The unsealed documents show other calls and messages between Kiani and employees of RTW, a New York-based health care company.
In addition to its actions against Masimo, Politan also accused RTW of engaging in a so-called blank voting scheme, i.e. voting in favor of a group of directors of the board of directors despite the fact that RTW no longer owned the underlying shares for its votes.
Other documents released Friday show that Masimo was aware of RTW’s efforts. They include communications from Masimo advisers that show the company knew RTW was amassing a large position and backed Kiani’s leadership.
“As a long-time shareholder, I wanted to know what you think of this PR before we announce it,” Kiani wrote in the email, titled “Confidential PR and 8K for tomorrow before the market opens.”
A filing the following day confirmed that activist investor Politan had launched a second proxy fight and was nominating two board members. Politan cited Masimo’s poor performance and Kiani’s disastrous acquisition of a consumer business two years ago as pushing the company to explore a spinoff.
The Wall Street Journal had, last week, reported that Monday proxy war is coming.
Masimo is best known for litigation with Apple about the company’s use of pulse-oxygen technology in the Apple Watch. Kiani is also a close friend of President Joe Biden and has donated to his campaigns. One of Kiani’s top advisers in the proxy fight is Greg Schultz, who served as Biden’s campaign manager in 2020.
“Please do not trade anything until this information is released, which will be released before the market opens tomorrow morning,” Kiani wrote in an email to Yalamanchi. The message included two attachments and a timestamp indicating when the press release was released.
An SEC regulation called Regulation FD requires that if a company provides information to certain individuals, including major shareholders, it must promptly provide that information to everyone.
Politan launched an earlier proxy fight at Masimo, which resulted in the activist winning two board seats in 2023, including one for managing partner Quentin Koffey.
A Masimo spokesman declined to comment. A Politan representative also did not immediately respond to a request for comment.
Correction: This article has been revised to reflect that Masimo makes devices that monitor a person’s blood oxygen levels. A previous version mischaracterized the devices’ functions.
