Masimo (NSDQ:MASI) said yesterday that federal prosecutors cleared the company and its employees in a probe launched last year into some of its patient monitoring devices.
Almost exactly a year ago, Irvine, Calif.-based Masimo said the office of the U.S. attorney for central California issued a subpoena requesting "documents related to our Pronto and Pronto-7 products.”
"The government has indicated that it expects to issue additional subpoenas as the investigation proceeds. The company is fully cooperating with the investigation," Masimo said at the time.
Yesterday the company said the U.S. attorney’s office "has decided not to initiate any criminal charges against Masimo or any of its current or former employees in connection with the investigation."
The Pronto and Pronto-7 devices, which are designed to measure total hemoglobin, oxygen saturation in the blood, pulse rate and perfusion index, were the subject of a whistleblower lawsuit filed by former Masimo sales reps in 2010.
In October 2013 a federal judge tossed the False Claims Act case, ruling that the sales reps failed to provide any evidence of fraud or fraudulent intent. The same judge in February 2014 overturned a $5 million arbitration award given to 2 of the sales reps, finding that the arbitrator was biased against Masimo because of his brother’s work as a lawyer for patient monitoring rival Covidien.
That prompted Masimo to reverse the $8 million charge it had set aside to cover the arbitration award and a payment to its insurance carrier.
