Banton Group files third class action on embattled Nuix after listing rout

The troubled tech company is facing a third class action alleging it misled the market during its IPO, with six executives and Macquarie Capital dragged into the dispute.

Jonathan Rubinsztein is the new CEO of Nuix, which is fending off a third class action over its December 2020 IPO.

Banton Group has become the third law firm to file a shareholder class action against embattled Nuix over allegations it misled the market during its December 2020 initial public offering.

Banton Group filed the class action in the Supreme Court of Victoria on Wednesday for lead applicant Stella Bahtiyar alleging Nuix, Macquarie Capital and several directors and officers of the tech company made misleading statements in the initial public offering prospectus.

Documents filed in the Supreme Court of Victoria claimed Nuix made misleading statements in market disclosures and failed to update the market up to May last year.

“Nuix’s share price was inflated by these representations and omissions, and that the Defendants’ actions caused the group members who acquired shares to suffer loss and damage,” court documents said.

Macquarie and six directors and officers of Nuix were allegedly involved in making the misleading statements, they continued.

The class action brings claims against former Nuix executives Jeffrey Bleich, Susan Thomas, Ian Lobban, Rodney Vawdrey, Daniel Phillips and David Standen.

Banton Group will apply for an order that its legal fees be calculated as a percentage of the total amount awarded to the group members and will conduct the action on a “no win no fee” until the application is decided.

The two other class actions against Nuix, filed by Shine Lawyers and Phi Finney McDonald in November last year, do not bring claims against the tech company directors, according to court documents.

The class action, filed on behalf of people who bought Nuix shares between November 18, 2020 and May 31, 2021, comes after Amanda Banton confirmed in May last year her firm was investigating whether it would launch the proceedings.

Nuix, which launched on the ASX at $8.50 a share and hit a record high of $11.86 in January, and closed at $3.15 last May.

The Nuix IPO raised $953m in December 2020 and was the biggest float that year.

But in February last year, Nuix announced its results for the second half of 2020, stating that revenue was down 4 per cent. Nuix shares fell by 32 per cent because of the announcement, according to the Banton Group.

In April, Nuix revised its FY21 forecasts down from $193.5m to $180-$185m.

Confirming plans to investigate a potential class action on behalf of shareholders of Nuix, Ms Banton said in May there were “potential conflicts of interests” that needed to be investigated, including the roles of major shareholder Macquarie Bank, and its representatives on the board.

Ms Banton said her firm’s investigation of the Nuix IPO would include a review of the roles of Macquarie Bank, its representatives on the Nuix board, its auditor PwC and the joint lead managers of the float, Morgan Stanley and Macquarie Capital.

She said the December 4 IPO of the company, which raised $953m, allowed Macquarie Bank and senior company executives to “cash out” some of their investments in the company.

She said this may have left the company with “insufficient financial flexibility to support its growth strategy”.

In a market announcement on Thursday, Nuix said it “disputed” the allegations in the class action and will be defending the lawsuit in court.