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Nuix share price crashes again as ASIC investigation intensifies

We examine the latest developments from the beleaguered analytics company.

Who would of thought that the Nuix story would end up involving insider trading allegations.

The investigative analytics and intelligence software company on Wednesday told the market that it was aware that ASIC was investigating the company's former CFO (as well as his brother and father).

Nuix also told the market that it had become aware of a separate investigation by ASIC – centred on allegations that the company’s IPO prospects contained a number of misleading or false elements.

While Nuix said it was 'fully committed to cooperating in any such investigation' with ASIC, the market release was relatively scarce, with it being pointed out that the company 'is not aware of the precise nature of the investigation beyond the information outlined above and has not received any formal notification from ASIC in relation to any such investigation.'

Despite the lack of formal notification, media speculation has run rampant in the last few days, giving us a more complete picture of just what is going on.

Insider trading allegations

Core to this latest drama are allegations that Nuix’s now ex-CFO – engaged in insider trading – netting himself $17.8 million in profits in the process.

Ultimately, how we got there is a rather complex affair, involving allegations concerning: off-shore companies, inter-family options dealing and the communication of market moving information.

Nuix management said they were ‘genuinely disturbed’ by the allegations levelled against its former CFO and his associates.

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Prospectus in question

Besides the issues concerning Mr Doyle specifically, ASIC is also investigating a number of issues related to Nuix’s IPO prospectus.

According to an affidavit from Jenny Truong, a senior lawyer at ASIC, the regulator:

‘Is investigating, among other things whether Stephen Doyle gave to the ASX, or permitted to be given to the ASX, a prospectus including information about the forecast revenue of Nuix for the financial year ended 30 June 2021 that was false or misleading in a material particular, without having taken reasonable steps to ensure that it was not false or misleading.’

Nuix share price in tatters

With Nuix failing to hit its operational targets over the last six months – and now these latest revelations – it should come as little surprise that the stock fell sharply on Wednesday. Indeed, as investors mulled the news of a dual-ASIC investigation into the company, Nuix saw its share price crash to a 52-week low, hitting $2.16 during the session.

By 12:58 PM the stock was down 12.99% to $2.21 per share.

YTD Nuix has shed 74% of its value.

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