ASIC sues Nuix board for alleged deceptive, misleading conduct

The company regulator is taking authorized motion towards troubled tech firm Nuix and its board for allegedly breaching their steady disclosure obligations, whereas clearing the insider buying and selling costs towards former firm CFO Stephen Doyle and his brother Ross D

The Australian Securities and Investments Fee (ASIC) on Thursday mentioned it has filed papers in Federal Court docket, alleging that Nuix’s board had maintained the forecasts of statutory income and annualised contract worth (ACV) within the firm’s prospectus regardless of realizing the figures have been materially decrease.

The authorized motion comes after a joint investigation by The Sydney Morning Herald, The Age and The Australian Monetary Evaluate in Might final yr uncovered severe tradition and governance points inside Nuix and a blotted historical past of persistently lacking budgets and gross sales forecasts.

Macquarie-backed Nuix, which offers investigative analytics and intelligence software program, was the largest preliminary public providing (IPO) for 2020. It listed in December 2020 at a problem value of $5.31, soared above $11 in January as traders lapped up its 330-page prospectus, then crashed 32 per cent in February after traders have been blindsided by the corporate’s half-year outcomes.

A prospectus is a proper assertion lodged with the regulator which incorporates data and context that helps traders make knowledgeable selections when assessing an funding.

ASIC introduced earlier this yr that it had concluded an investigation into statements made in Nuix’s prospectus, that are alleged to have wrongly pitched the software program firm as a progress inventory to traders, and mentioned no motion could be taken.

However in proceedings filed within the Federal Court docket late on Wednesday, ASIC alleges that the information analytics firm made deceptive or misleading statements in its updates to the ASX in February and March final yr, which reaffirmed the forecasts contained within the prospectus.

The regulator additionally alleges that Nuix breached its steady disclosure obligations together with by failing to announce a downgrade after its annualised contract worth and statutory income for the 2021 monetary yr had been reforecast.

Nuix chair Jeffrey Bleich, Rodney Vawdrey, Susan Thomas, Daniel Phillips and Iain Lobban are alleged to have breached their duties by failing to take cheap steps to stop Nuix from making the deceptive statements and breaching steady disclosure obligations.