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ASIC commences proceedings against Nuix
The Australian Securities and Investments Commission (ASIC) has officially commenced legal proceedings in the Federal Court against Nuix for alleged misdoings during the period from mid-January 2021 to April of the same year.
Lauren Croft
The global tech company and its directors are facing proceedings in the Federal Court for what ASIC alleges are disclosure breaches of both the Corporations Act and ASIC Act.
This news follows a turbulent few years for the tech company. In November last year, Nuix was hit with a class action from Shine Lawyers, followed by a second from Phi Finney McDonald in March this year. In August, the Supreme Court ordered that those class actions be combined.
Both alleged that Nuix contravened provisions of the Corporations Act 2001, the Australian Securities and Investments Commission Act 2001 and the Australian Consumer Law.
After listing on the ASX at $5.31 in December 2020, Nuix’s share price dropped repeatedly over a short period, growing to a high of over $11 in January 2021 and then dropping to under $3 following the series of earnings downgrades up to 31 May 2021.
The launch of the class action from Shine Lawyers came after Nuix made a statement to the ASX noting that a search warrant was executed at the company’s Sydney office, “seeking documents in relation to an investigation into the affairs of an individual” as part of an ASIC investigation.
In August 2021, the global tech company expressed confidence that it had complied with accounting and disclosure obligations in the wake of the investigation, followed by optimism after a “challenging year”, and also the company’s acquisition of Boston-headquartered software company Topos Labs in September 2021.
In February this year, ASIC stated that it had completed certain aspects of its investigation into the company — which asked Nuix to retain financial statements and a 2020 prospectus.
The investigation — including into the company’s now-former chief financial officer Stephen Doyle, who was terminated by Nuix in mid-June 2021 — surrounded suspected contraventions of the Corporations Act in relation to their FY 2018, 2019 and 2020 financial statements and the IPO prospectus lodged with ASIC and the ASX.
In these proceedings, ASIC seeks “declarations in respect of the alleged contraventions, pecuniary penalties against Nuix and pecuniary penalties and disqualification orders against the relevant directors”, according to a statement to the ASX from Nuix.
“Nuix has fully cooperated with ASIC during the course of its investigation into these matters,” the company stated.
“Nuix denies the allegations made against it and the allegations made against the director respondents and intends to defend the proceedings.”
Lauren Croft
Lauren is a journalist at Lawyers Weekly and graduated with a Bachelor of Journalism from Macleay College. Prior to joining Lawyers Weekly, she worked as a trade journalist for media and travel industry publications and Travel Weekly. Originally born in England, Lauren enjoys trying new bars and restaurants, attending music festivals and travelling. She is also a keen snowboarder and pre-pandemic, spent a season living in a French ski resort.
