Document reveals flurry of emails between ASIC and Nuix over insider trading investigations

Nuix and the corporate regulator were in talks over the nature of a probe for nearly week before the troubled technology company updated investors.

Nuix and the corporate regulator were in talks over insider trading allegations for nearly week before the troubled technology company updated investors as to the nature of its regulatory probe, new documents show.

The comments were contained in a flurry of communications between Nuix and the Australian Securities and Investments Commission “in regards to insider trading” at the company following raids on the company’s office on June 24.

Between June 24 and June 30 ASIC and Nuix exchanged nine separate email chains of varying lengths.

However, Nuix did not inform the market of the nature of the investigations - insider trading -until June 30.

The contents of these email chains have not been disclosed, with ASIC rejecting The Australian’s freedom of information request beyond simply revealing those documents existed.

An ASIC lawyer denied the request, noting the nine documents “relate to an ongoing investigation” and that the release of the documents would be prejudicial to the conduct of that investigation.

The email chain begins on June 24 with Nuix first emailing ASIC just hours after the raid at the technology company’s Sydney office.

This was followed by a five-page email from ASIC back to Nuix, followed by a three-page response by the tech company.

ASIC raided Nuix’s office at 8.30am on June 24 as part of its efforts investigating alleged insider trading by the company’s former chief financial officer Stephen Doyle. The Australian has attempted to contact Mr Doyle.

On June 24 Nuix issued market update to investors noting ASIC were “seeking documents in relation to an investigation into the affairs of an individual” and did not note the focus on the investigation was its prior chief financial officer.

Two days later on June 26 ASIC responded to Nuix with a four page email.

Three days later, on June 29, Nuix emailed ASIC, with the regulator returning fire with a one page response the same day.

The June 29 email coincided with ASIC bringing to court efforts to prevent Mr Doyle, and his brother Ross Doyle leaving the country.

The corporate regulator alleged the Doyle brothers had orchestrated a $17.8m insider trading scheme, seeking they be banned from leaving the country until October 25.

No charges have been brought against Stephen, Ross, or Ronald Doyle for insider trading and The Australian does not suggest any wrongdoing.

On June 30 Nuix responded to ASIC with a two-page letter, with the regulator returning serve with a three page response.

This was the same day Nuix updated the market to say it had “come to understand that ASIC’s Financial Reporting and Audit Enforcement Team had begun a separate investigation into the affairs of Nuix – specifically contraventions of the Corporations Act in relation to financial statements and its IPO prospectus”.

A Nuix spokeswoman said they were unable to respond given questions put by The Australian “relate to active investigations by ASIC we are limited in what we are able to say”.

“We can confirm that Nuix is confident that it has at all times complied with its market disclosure obligations,” she said.

On Tuesday Nuix said it had come to a “fuller understanding” of investigations into the company by way of ASIC notices issued to its auditors PWC.

In a statement to the market released earlier Tuesday Nuix said ASIC was investigating its financial statements for the period ending 30 June 2018, 30 June 2019 and 30 June 2020.

ASIC is also believed to be investigating Nuix’s prospectus dated 18 November 2020 and the company’s market disclosure in the period between 4 December 2020 to 31 May 2021.

“Nuix has not received any formal notification of an investigation from ASIC and remains confident that it has complied with its accounting and disclosure obligations,” Nuix said in a statement.

On Tuesday at midday Nuix shares were trading 2.7 per cent higher at $2.69.