Joe Kiani, the former CEO of Masimo and founder of US Health Company, has recently been terminated by his own board and is now facing a major lawsuit. The lawsuit alleges that Kiani colluded to create RTW Investments, a group that violated federal securities laws and attempted to manipulate the recent vote that led to his ousting.
After losing the boardroom battle at the recent AGM, Kiani and RTW Investments are facing new challenges. Employees at Masimo Consumer, the audio and smartwatch company spun out from the main health business, are uncertain about their future and whether the business will be sold or merged.
Following Kiani’s resignation from the medical products company he founded, Masimo reaffirmed its financial guidance for the third quarter and full-year anticipated results. The board officially terminated Kiani’s employment, effective as of October 24, 2024, despite his previous resignation.
In addition to his termination, Kiani is facing a separate legal action alleging that he had a secret agreement with RTW Investments to manipulate the outcome of a corporate election in violation of federal securities laws. Masimo claims to have evidence of wrongdoing by its former CEO, including a photo of a whiteboard showing vote totals of major investors that was shared with RTW.
The company is seeking various forms of relief from the court, including declaring that the defendants formed a group in violation of the Exchange Act, requiring them to disgorge profits, and awarding attorneys’ fees and costs. If the court agrees with Masimo, Kiani and RTW Investments could face serious consequences for their actions.
David Richards, a seasoned technology journalist, has been covering the impact of technology on business and consumers for over 30 years. He has a wealth of experience in the field and has won awards for his investigative journalism. Richards’ insights provide valuable context to the story of Joe Kiani and the legal challenges he is currently facing.