By Svea Herbst-Bayliss

NEW YORK, Feb 2 (Reuters) - The hedge fund industry trade association MFA on Thursday backed an activist investment firm's push to reverse "draconian" amendments to medical device company Masimo Corp's bylaws, weighing in on one of investment world's most closely watched legal cases.

MFA on Thursday filed an amicus curiae, or friend of the court brief, to express "serious concerns" about the bylaws, arguing that if the court rules that they are enforcible, the provisions would have a direct negative impact on MFA's members, their investors and stockholders more broadly."

The new requirements by Masimo Corp would force any activist planning to nominate directors at the medical device maker to disclose the identities of the fund's limited partners and future plans to nominate candidates elsewhere, information that is usually considered top secret by hedge funds.

Politan Capital Management, which owns an 8.9% stake in Masimo and is run by Quentin Koffey, has hinted at plans to seek board seats. It sued Masimo, which has a market capitalization of $9.1 billion, in October in Delaware Chancery Court.

The lawsuit sparked debate among corporate governance experts, activist investors and corporate executives over how to proceed as the industry adjusts to new corporate ballot rules that could make it easier for activists to win board seats.

"If upheld by the Court, these Bylaw Amendments will have a chilling effect on investors who root out corporate fraud, waste, and abuse," said Bryan Corbett, MFA's chief executive officer.

MFA, which has more than 150 members who jointly manage $2.6 trillion in assets, argues the consequences of these bylaws would harm a wide group of investors not just activists who push for change at corporations by seeking board seats. "The bylaw provisions at issue threaten to limit stockholders' incentives and ability to engage with management teams and boards in order to effect beneficial change. That, in turn, will weaken market-based accountability mechanisms that act as important checks and balances in our corporate governance system to the disadvantage of all stockholders," the brief said. (Reporting by Svea Herbst-Bayliss; Editing by Christopher Cushing)