Menu
Nuix faces class action over 'inflated' IPO forecast

Nuix faces class action over 'inflated' IPO forecast

Claims of misrepresentation in prospectus “ultimately cost shareholders hundreds of millions of dollars”.

Credit: Supplied

Beleaguered local software vendor Nuix is facing a class action over alleged misrepresentations or omission in its initial public offering prospectus (IPO) and market disclosures.

Filed by Shine Lawyers on 19 November, class actions practice leader Craig Allsopp claimed the firm’s investigation found the “company’s prospectus and financial forecasts may have misrepresented or omitted financial information and potential risks, which was misleading and deceptive to investors”.

The allegations relate to a report by The Sydney Morning Herald, which claimed an investigation by the Australian Securities and Investments Commission (ASIC) looked into whether Nuix’s primary backer Macquarie Group overstated the company's sales forecasts ahead of its listing. 

Following this, the vendor’s former CEO, Rod Vawdrey, and then CFO, Stephen Doyle, stepped down in June

“This inflated forecast has ultimately cost shareholders hundreds of millions of dollars,” Allsopp said.

“Our class action aims to recover these losses for the thousands of investors impacted by Nuix Limited’s alleged misconduct.”

The amount of damages sought is yet to be determined. In response to the class action, the vendor said that it rejected the accusation.

“Nuix disputes the allegations and will be defending the claim,” Nuix’s official statement said.

The filing of the IPO is the latest instalment in Nuix’s turbulent last six months, with the vendor cutting consultancy ties with co-founder Anthony Castagna following investigations by the Australian Federal Police over possible breaches of the Corporations Act.

In June, its office was searched by authorities seeking documents in relation to an investigation into the affairs of an unnamed "individual”.

Later that month, the vendor’s chair, Jeffry Bleich, said he was genuinely disturbed” by allegations concerning Doyle on suspected contraventions of the Corporations Act in relation to financial statements for the periods ending 30 June 2018, 2019 and 2020 lodged with ASIC. 

Then in August, Nuix reported its profits for 2021 sunk by 107 per cent, ending the financial year with a $1.6 million loss. 

However, in September it acquired all the shares of Boston-based natural language processing (NLP) software maker Topos Labs, paying US$5 million up front, with a potential US$20 million extra on the table.


Follow Us

Join the newsletter!

Or

Sign up to gain exclusive access to email subscriptions, event invitations, competitions, giveaways, and much more.

Membership is free, and your security and privacy remain protected. View our privacy policy before signing up.

Error: Please check your email address.

Tags Nuix

Events

ARN Innovation Awards 2022

Innovation Awards is the market-leading awards program for celebrating ecosystem innovation and excellence across the technology sector in Australia.

EDGE 2022

EDGE is the leading technology conference for business leaders in Australia and New Zealand, built on the foundations of collaboration, education and advancement.

Brand Post

Channel Roadmap

The Channel Roadmap is a bespoke content hub housing strategic priorities from technology vendors for 2022 and beyond, partners can find the guidance on the key technologies and markets to pursue, to help build a blueprint for future success.

Show Comments