ASIC’s market disclosure claims against Nuix dismissed, regulator to pay costs
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The news: The Australian Securities and Investments Commission has lost its long running battle against Nuix, with the Federal Court dismissing ASIC’s claims that the software provider misled investors in when it listed in 2020.
The context: Handing down the decision on Thursday, Judge Scott Goodman dismissed ASIC’s entire claim and ordered the regulator to pay all costs.
Nuix, which listed in December 2020 at $5.31 per share, surged over $11 in January 2021 before plummeting 32% in February, after its half-year results disappointed. ASIC accused Nuix of continuous disclosures breaches, alleging that the software company made misleading or deceptive statements in ASX updates in February and March 2021 when it reaffirming forecasts made in its prospectus, as well as accusing then-directors of breaching their duties.
ASIC argued that Nuix failed to act quickly enough to notify shareholders about changes in its guidance, taking over one month to inform the market.
“I am not satisfied that Nuix did not have reasonable grounds for the re-affirmation of the Prospectus Revenue Forecast on 26 February 2021,” Goodman wrote. “As ASIC has failed to establish any of the alleged contraventions by Nuix, its claim against each of the directors must be dismissed.”
ASIC has a period of time to consider whether it will appeal the decision.
Last May, Nuix withdrew its estimated annualised contract value target range of 11% to 16% in constant currency, along with strategic targets relating to revenue growth and underlying cashflow, stating that it had become difficult to predict closure times around specific transactions due to uncertainty in customer decision making.
What they said: In a statement to the ASX on Thursday following the decision, Nuix chairman Robert Mactier said: “We are pleased that the Federal Court has resolved the allegations concerning Nuix’s early 2021 market disclosure and that the cases against both Nuix and the then directors of the company have been dismissed.”
The sources: Federal Court judgment, Nuix statement
