Nuix faces second class action as Phi Finney McDonald enters the fold

Data analytics and intelligence software company Nuix (ASX: NXL) is staring down its second class action in relation to its spectacular fall from grace after a December 2020 initial public offering (IPO), as shares continue to trade at less than half their $5.31 listing price.

After Shine Lawyers launched a class action against the company alleging disclosure obligation breaches with inadequate revenue guidance and misleading sales forecasts, Nuix has revealed it has become aware of a second class action claim filed against it in the Supreme Court of Victoria on 23 November.

"While the claim has not been served on Nuix and there has not been any contact from the plaintiff or his lawyers, the second claim has been commenced by Phi Finney McDonald on behalf of Daniel Joseph Batchelor and persons who acquired interests in Nuix shares by subscription in its IPO or in the period between 4 December 2020 and 29 June 2021," Nuix said in a statement to the ASX this morning.

"The claim relates to information contained in Nuix’s Prospectus and Nuix’s disclosure concerning forecast FY21 revenue and alleges that Nuix contravened provisions of the Corporations Act 2001 (Cth) and the Australian Securities and Investments Commission Act 2001 (Cth).

"The claim covers similar subject matter to the claim filed by Shine Lawyers which was announced on 22 November 2021 and does not identify the amount of any damages sought."

Nuix adds Batchelor's claim has also been commenced against Macquarie Capital (Australia) Limited and Macquarie Group Limited as co-defendants.

"Nuix disputes the allegations and will be defending the claim in the event it is served," the group says.

Business News Australia has reached out to Phi Finney McDonald for comment but at the time of writing is yet to receive a response.

The law firm had earlier announced it was investigating whether:

1. the Prospectus contained materially misleading statements or omissions;
2. Following its IPO, Nuix engaged in misleading or deceptive conduct, and breached its continuous disclosure obligations;
3. Nuix’s share price was inflated as a result of the alleged contraventions, and whether shareholders suffered loss and damage as a result.

Nuix is also the subject of multiple investigations from the Australian Securities and Investments Commission (ASIC) regarding potential contraventions of the Corporations Act in relation to its disclosure obligations and prospectus, as well as allegations of insider trading and dealing with the proceeds of crime.

ASIC is investigating whether former Nuix CFO Stephen Doyle engaged in insider trading and profited with millions of dollars worth of gains.

"We are genuinely disturbed by the allegations concerning Mr Doyle and will fully assist ASIC in getting to the bottom of that matter," Nuix chair Jeffrey Bleich said in an ASX announcement in June.

Late last week the group also revealed its incoming CEO Jonathan Rubinsztein, who resigned from Infomedia (ASX: IFM) in October, would take up his appointment earlier than expected and would now start on 6 December 2021.

The leadership shuffle follows the announcement in June that current chief executive officer Rod Vawdrey would depart, although he committed to sticking around while an international search was conducted and allowing for an orderly leadership transition.

It was confirmed last week that Vawdrey would cease in the role from early December as he hands over formally to Rubinsztein.

"The Board would like to thank Rod for his strong leadership over the last six years. Rod’s passion for Nuix and his belief in the vison of “finding truth in a digital world” has been a significant factor in the Company’s growth, the expansion of its customer base and the increase in its geographic presence," Bleich said.

"We look forward to Jonathan starting earlier in the role and the expertise he brings to lead Nuix into its next phase.

"He has a proven record of steering an ASX-listed entity through a period of transformation and growth as well as a deep understanding of the opportunities for the Company on the global stage."