RTW Investments is being investigated by the Securities and Exchange Commission (SEC) for its alleged involvement in an empty voting scheme in relation to a proxy battle between Masimo Corp. and Politan Capital Management.
Masimo in October filed a lawsuit against founder and former CEO Joe Kiani, accusing him and RTW Investments of attempting to secretly manipulate the September shareholder vote in his favor.
In a letter to investors, RTW Investments, a New York-based investment adviser, said it’s cooperating with the agency and that “the existence of a probe doesn’t mean laws were broken,” according to Bloomberg.
Masimo claims that RTW Investments only owned 2.8% of the company’s common stock prior to the shareholder vote.
In the days leading up to the meeting, Masimo said RTW more than tripled its ownership to 9.9% by buying shares and used short sales to ensure its “economic exposure remained at or below 2.8%.”
RTW Investments refuted the empty voting claims and said the ongoing lawsuit has to do with the $450 million severance payout Kiani is suing Masimo for.
“We are looking forward to working with the SEC to assist it in understanding the facts. As set forth in our motion to dismiss the SDNY case, the dispute between Masimo and Joseph Kiani has nothing to do with RTW,” Sanford Michelman, attorney for RTW Investments, said in a statement.
“Rather, it appears that the Politan-controlled Masimo is trying to avoid paying its founder and former CEO Joseph Kiani a $450 million severance package. In fact, Masimo’s Lead Independent Director, Craig Reynolds, reviewed this matter and concluded that no voting arrangement between anyone at the company and RTW. Thereafter, Masimo represented this finding in writing to the SEC four times between July and September 2024.”
The suit was filed in the U.S. District Court for the Southern District of New York.
