Ann: ASIC Enforcement Proceedings, page-49

Others have already commented on the implications for Nuix and its directors of ASIC finally taking enforcement action earlier this week - ASIC's actions will clearly embolden and, in many respects, validate the Shine/PPM Class Action.

However, it is worth noting that the Class Action's claim is for a much broader suite of offences, including for issuing a misleading and defective Prospectus and for failing to have in place appropriate corporate governance systems that should have been able to track the alleged insider trading by former CFO, Stephen Doyle, and his Swiss-based brother, Ross.

The directors, particularly for Dan Phillips who is now joined personally in both the ASIC action and the class action, would almost certainly feel deeply unsettled upon a close read of the Consolidated Statement of Claim.

The Statement of Claim can be found here and even just a cursory glance of the table of contents on page 2 (copied below) makes for compelling reading. The Prospectus wasn't just defective in terms of the financial forecasts, rather it failed to disclose material other Nuix Management Information that investors should have been informed of. This could give ASIC a very good reason to reopen its investigation into the Prospectus.

Either way, the Nuix board must be feeling very queasy about what the coming months (and years) will mean for their careers and lives, particularly for the Australian based directors (Vawdrey, Phillips and Thomas)....

Meanwhile, the former directors who stepped off the board just prior to the float (Messrs Standen, Castagna, de Ambrosis and Grady) must be breathing a huge sigh of relief... for now at least. But that could quickly change if evidence emerges that they were indeed aware of the management and governance issues prior to the IPO and withheld those details from the incoming independent directors.

Interesting times ahead....

https://www.supremecourt.vic.gov.au/sites/default/files/2022-09/Lay%20v%20Nuix%20-%20Consolidated%20Statement%20of%20Claim.pdf