Shareholders of Macquarie-backed Nuix filed a class action in the Supreme Court of Victoria on Friday, alleging the company provided investors with inadequate guidance on revenue, misleading sales forecasts and breached the company’s continuous disclosure obligations.
Shine class actions practice leader Craig Allsopp said the firm’s investigation has revealed that the “company’s prospectus and financial forecasts may have misrepresented or omitted financial information and potential risks, which was misleading and deceptive to investors.”
According to the court document, seen by InvestorDaily, the class action alleges that some group members would not have purchased shares in Nuix had the alleged wrongdoing not occurred, and that they ultimately overpaid for shares.
“This inflated forecast has ultimately cost shareholders hundreds of millions of dollars,” said Mr Allsopp.
“Our class action aims to recover these losses for the thousands of investors impacted by Nuix Limited’s alleged misconduct.”
Nuix’s share price had suffered repeated drops over a short period of time, from a listing price of $5.31 to a high of over $11 in January 2021 and then under $3 following the series of earnings downgrades up to 31 May 2021.
“Investors who purchased NXL shares from the IPO, or on the ASX between 18 November 2020 and 30 May 2021, are encouraged to register for the class action,” Mr Allsopp said.
Earlier this year, a Labor senator revealed evidence at a parliamentary committee suggesting ASIC officials took a rushed approach to reviewing Nuix’s IPO.
“Nuix lodged a prospectus with ASIC on 18 November, and between 23 and 26 November we received three complaint letters [about Nuix] from a law firm on behalf of an anonymous client,” ASIC chairman Joe Longo told the committee in June.
“We questioned the company in relation to a number of areas of revenue recognition, but it did not appear the prospectus contained any omissions.”
Mr Longo added that he did not have concerns about the processes followed by the regulator before Nuix’s IPO and that ASIC was limited in what it could do to protect investors from what a senator called an “undercooked” listing by the tech firm.
Just days later, Nuix filed 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”.
“Nuix understands that the warrant does not relate to any allegation of wrongdoing by the company,” the statement read.
It was then that Shine confirmed its investigation into the tech company, noting it was looking into the conduct of Nuix in the lead-up to and the period following its float on the ASX late last year.
