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Data intelligence software firm Nuix (ASX: NXL) has confirmed that the Australian Securities and Investments Commission (ASIC) is investigating the acquisition of company shares by CEO Jonathan Rubinsztein in 2022.
ASIC’s investigation concerns the purchase of shares made by Rubinsztein in September of last year - an action which attracted the attention of the Australian Stock Exchange (ASX: ASX) that same month.
At the time, the ASX questioned whether Rubinsztein had sought approval to acquire the shares considering it was later revealed that the company was under consideration as a takeover target by legal software company Reveal. The CEO denied any knowledge of these negotiations.
Back in September, the software company said Rubinsztein sought approval of non-executive chair Jeff Bleich to purchase the shares.
Nuix has also backed its CEO today and says it will cooperate with the watchdog’s investigation.
“The CEO’s acquisition of Nuix shares took place with prior approval and during an approved trading window,” Nuix says.
According to a letter sent to the ASX last year, Rubinsztein sought approval to acquire shares on 1 September - a few days before Bleich had preliminary discussions with Reveal’s CEO about whether Nuix would be interested in a potential transaction involving NXL’s assets.
The company did not progress with that proposal, and notes that ‘no actual proposed transaction was outlined and the inquiry was not reduced to writing’.
Shortly after this discussion, The Australian published a report concerning speculation in relation to the Reveal proposal. Nuix went into a trading halt that day and later confirmed that it had not received a bid or a written proposal from Reveal.
Correspondence from the ASX was sent to Nuix that same day within which the Exchange questioned Rubinsztein’s acquisition of shares.
Five days later, Nuix replied and said that Rubinsztein was not aware of the proposed discussion between Bleich and Reveal until 9 September, eight days after he sought permission to acquire shares in NXL.
The company said Rubinsztein’s acquisition ‘was compliant’ as it did not occur during any ‘prohibited period’, occurred during a trading window, and he did not possess inside information at the time of the trades.
The update comes after ASIC announced it was taking legal action against Nuix in September last year, alleging continuous disclosure breaches connected to downgraded performance forecasts in 2021.
Having listed on the ASX in early December 2020, almost three months later the company reaffirmed prospectus forecasts for FY21 of $193.5 million in revenue - an estimate that was progressively lowered in April and May, before the final result announced in August ended up being down almost 9 per cent on that original projection.
"Nuix was a newly listed technology company with a complex business model. This meant investors relied heavily on the company making accurate and timely disclosures regarding its earnings," ASIC chair Joseph Longo said.
Shares in Nuix are up 3.54 per cent to $1.02 per share at 12.18pm AEST.
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