Nuix hit with third shareholder class action over prospectus disclosure

A third shareholder class action has been filed against ASX-listed software company Nuix (ASX: NXL) over alleged disclosure obligation breaches relating to its December 2020 initial public offering (IPO).

Law firm Banton Group, founded by Amanda Banton in 2020, is behind the latest claim which alleges Nuix contravened provisions of the Corporations Act, the Australian Securities and Investment Commission Act, and Australian Consumer Law.

As with two other class action claims which were filed by Phi Finney McDonald and Shine Lawyers in November 2021, the Banton claim follows the data analytics and intelligence software company’s fall from grace following its IPO, with shares still trading well below the $5.32 listing price.

Shareholders fled from the firm after Nuix announced its half year results for the six months ending 31 December 2020 which stated revenue was down 4 per cent year on year, and represented 44 per cent of the full year forecast as per the IPO Prospectus. As a result, NXL shares fell 32 per cent.

This downward spiral continued when Nuix revised its FY21 forecasts, with shares closing at $4.29 per share on 21 April 2021, and reached as low as $3.14 per share on 17 May 2021.

As of the time of writing, Nuix is trading at just $1.28 per share.

While Banton’s claim does not identify the amount of damages sought, Nuix says it names some other parties associated with the IPO, including directors during the relevant period as co-defendants.

Because there are now three competing class action lawsuits, Sydney-based Nuix says it has gone to the Supreme Court to deal with the overlap.

“Nuix disputes the allegations contained in the claim and will be defending it,” Nuix says.

“There is currently a process being undertaken before the Supreme Court to seek to deal with the competing and overlapping claims made in the two class actions which have been previously served.

“Nuix anticipates that this claim will also be dealt with as part of that process.”

The launch of Banton’s class action comes one month after ASIC dropped two investigations into Nuix’s financial statements and prospectus.

The financial watchdog has not let the software company off the hook completely though, with one investigation into market disclosure in the period since listing ongoing.

Shares in NXL are up by 0.94 per cent to $1.28 per share at 12.09pm AEDT.