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Home loan hoodwink sparks class action investigation

23 June 2021

Class Actions

Shine Lawyers is considering legal action on behalf of shareholders against Nuix Limited (NXL) for allegedly overstating sales forecasts and potentially failing to adhere to continuous disclosure obligations. 

NXL provides investigative analytics and intelligence software used by international regulators, tax officials, and law enforcement agencies, to run sensitive probes into fraud and misconduct. 

Class Actions Practice Leader Craig Allsopp said that Shine Lawyers was investigating the technology company’s conduct leading up to and after it floated on the ASX in December 2020. 

“Our class action investigation is twofold to see if shareholders have been misled, resulting in them losing significant amounts of money”, Mr Allsopp said. 

“We are looking into whether the prospectus for the initial public offering (IPO) misrepresented or omitted financial information and potential risks in its forecast, which would be misleading or deceptive to investors.” 

“The legal investigation is also seeking to determine whether or not, once floated, NXL failed in its continuous disclosure obligations to shareholders, given its share price has plummeted several times in a relatively short space of time and is now trading significantly below its listing price, Mr Allsopp said. 

  • On 4 December 2020, NXL commenced trading on the ASX at $5.31. 

  • By 26 February 2021, the company reported that it had only achieved around 44% of the yearly revenue forecast, achieving just $85.3 million against a target of $193.5 million. 

  • Although NXL also affirmed its prospectus guidance of $193.5 million in revenue for FY21, the announcements on 26 February 2021 resulted in a 32% reduction in NXL’s share price for one day, leaving shareholders in a shocking position. 

  • On 21 April 2021, NXL then downgraded its revenue forecast from the prospectus guidance. The share price fell a further 15% following this announcement. 

  • On 31 May 2021, NXL issued a second revenue downgrade. In response to this information, the share price took another 18% hit. 

  • On 7 June 2021, it was reported that ASIC is investigating whether NXL overstated its financial forecasts ahead of its listing on the ASX. 

On 15 June 2021, NXL announced that the employment of its chief financial officer had been terminated and that there will be a transition period to replace NXL’s CEO, who has decided to retire. “Investors who purchased shares from the NXL float between 4 December 2020 and 31 May 2021, are encouraged to register their interest in the class action,” Mr Allsopp said. 

Shareholders wanting to express their interest in the class action can do so at the Shine Lawyers’ Nuix Shareholder Class Action page

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