FOI shows Nuix on notice over CEO share trades eight months before disclosure

ASX-listed technology company Nuix did not disclose that the Australian Securities & Investments Commission was probing share purchases by its CEO for almost eight months.

Nuix chief executive Jonathan Rubinsztein. Picture: Britta Campion

ASX-listed technology company Nuix did not disclose that the Australian Securities & Investments Commission was probing share purchases by its CEO for almost eight months, a freedom of information request has ­revealed.

In its response to the FOI request, which was denied, ASIC said it moved to put Nuix on notice over the trades of its CEO Jonathan Rubinsztein on September 21, 2022, almost two weeks after the market operator queried his trades.

However, Nuix only disclosed Mr Rubinsztein was under investigation by ASIC in May this year. The FOI has revealed a flurry of correspondence with Nuix over the trading of shares by Mr Rubinsztein before a five-month pause, broken by confirmation of a formal investigation into potential breaches.

ASIC senior lawyer Haydar Tuncer said the regulator was denying access to the 17 documents requested because their release could “prejudice the conduct of an investigation of a breach, or possible breach, of the law”.

“These documents refer or relate to inquiries conducted by ASIC into the acquisition of Nuix shares by Mr Rubinsztein in early September 2022,” he said. “It is significant that the investigation is continuing. The risk of potential prejudice if disclosure is made while the investigation is ongoing is real.”

ASIC’s response to The Australian shows the regulator sent an email as well as two lengthy documents to Nuix on September 21, putting the company on notice it was probing Mr Rubinsztein’s share trades.

This came after the Australian Securities Exchange queried Mr Rubinsztein’s trades in Nuix in the days before a bid for part of the firm was made public, sending shares soaring.

In its response to the ASX, Nuix revealed Mr Rubinsztein traded shares in the tech firm in September after seeking approval from the then-chair Jeff Bleich.

This came after Nuix posted its full-year results in August 2022.

Mr Rubinsztein bought 800,000 shares in Nuix on September 6, 7 and 8, spending almost $236,269.

This came as Mr Bleich was fielding calls from technology company Reveal on September 6, over proposals to sell part of its business.

Mr Bleich briefed Nuix’s board on September 9 about the transaction, which he had rejected, with shares in Nuix placed in a trading halt as media speculation sent them soaring almost 27 per cent.

ASIC’s FOI response shows Nuix’s lawyers responded to ASIC on October 4, almost two weeks after the regulator’s first shot. The regulator returned serve two days later, with a seven page attachment, which Nuix responded to on the same day.

Nuix’s lawyers responded more than two weeks later on October 21 with several attached documents. The two sides exchanged several emails in December before a five-month lull.

On May 16 this year ASIC notified Nuix in a one-page letter. The technology company then revealed to investors that it was under investigation over “the acquisition of Nuix shares by its CEO in early September 2022 and Nuix’s response to an ASX inquiry”.

“The CEO’s acquisition of Nuix shares took place with prior approval and during an approved trading window. Nuix will fully co-operate with ASIC’s investigation,” Nuix said in May.

Mr Tuncer told The Australian Nuix had submitted that the release of the requested material “could reasonably be expected to unreasonably affect it and Mr Rubinsztein adversely in respect of their lawful business, commercial, financial or professional ­affairs”.

“While these submissions are confidential, I am satisfied that Nuix holds legitimate concerns about how release of the documents may detrimentally impact their business affairs, and the business and professional affairs of Mr Rubinsztein,” he said.

“In particular, I consider that it would be contrary to the public interest to disclose this business information, as it is sensitive and not publicly available, especially given the current ASIC investigation is ongoing.”