ASIC drops investigation into Nuix share trading by CEO Jonathan Rubinsztein

The corporate regulator has cleared another hurdle for Nuix, as the ASX-listed tech firm awaits the outcome of a court case against its directors over its ill-fated IPO.

Nuix CEO Jonathan Rubinsztein at their offices in Sydney. Picture: Britta Campion/The Australian

The corporate regulator has dropped an investigation into the boss of Nuix, clearing another hurdle for the ASX-listed tech company, after concluding there was insufficient evidence he knew about a potential acquisition approach for part of the company’s assets.

In a market update, Nuix revealed the Australian Securities & Investments Commission had notified the company it had finalised a probe into its chief executive Jonathan Rubinsztein.

ASIC had opened an investigation into Mr Rubinsztein after discovering the Nuix boss bought 800,000 shares in the listed tech company across three trades in September 2022.

Mr Rubinsztein dropped $236,269 on the trades, which came as Nuix was fielding a market approach from US-based legal software company Reveal, which had explored a potential purchase of some of Nuix’s assets.

Nuix revealed the potential approach, exclusively revealed in The Australian, noting it had not received a formal bid or written proposal but confirming contact had been made by Reveal to the company’s chair Jeffrey Bleach.

Nuix’s share price, depressed after a string of poor performance and missed estimates, jumped on the news.

ASIC had moved to probe Nuix’s handling of the issue as well as the company’s responses to the ASX’s listings compliance team on September 14.

The investigation into Mr Rubinsztein’s trades came as the latest in a smattering of legal action taken against the company by ASIC.

But on Monday, Nuix said ASIC had dropped the investigation, noting “the CEO’s acquisition of Nuix shares took place with prior approval and during an approved trading window”.

An ASIC spokesman said the regulator had concluded its investigation after finding insufficient evidence that Mr Rubinsztein traded shares with knowledge of the Reveal offer.

The spokesman said ASIC had undertaken a “detailed and thorough investigation” and had examined a number of Nuix staff and reviewed internal records and communications.

“The investigation did not identify evidence to suggest that at the time Mr Rubinsztein purchased NUIX shares he was aware that an approach had been made by Reveal,” the spokesman said.

“This was consistent with information provided by Nuix to the ASX in response to a query letter from the ASX concerning Mr Rubinsztein’s trading.”

ASIC said its investigation also found the listing rules did not require Nuix to disclose the terms of Reveal’s offer, given it was “incomplete and confidential”

“Nor was NUIX obliged to provide disclosure in response to the media speculation,” he said.

“ASIC may recommence its investigation, or commence enforcement action, if circumstances change.”

The move to drop the investigation comes as Nuix is anxiously awaiting judgement on ASIC’s case against current and former members of the company’s board.

ASIC had dragged Nuix to the Federal Court, alleging the company allowed breaches of continuous disclosure requirements, as well as claims of misleading and deceptive conduct.

The regulator also alleged Nuix’s board had breached their director’s duties, when they allegedly allowed false information to be published to the market and not corrected.

ASIC is seeking to ban Nuix’s chair Jeffrey Bleich, as well as directors Rodney Vawdrey, Susan Thomas, Daniel Phillips and Iain Lobban.

The regulator had alleged Nuix’s board knew it would not meet its financial forecasts in 2021, shortly after its initial public offering.

Almost $1.2bn in Nuix shares were traded in this period.

Justice Scott Goodman is set to deliver his judgement in the matter, after the case concluded in December last year.

Nuix was the biggest ASX IPO of 2020, but was later investigated by the corporate regulator over allegations it had lied in its prospectus documents.

Nuix has also faced media attention about concerns over its corporate governance and allegations it breached ASX disclosure rules, as well as multiple shareholder class actions following its $1.8bn IPO in 2020.

Mr Rubinsztein said last August that while some of the critical media coverage had affected Nuix’s sales and contract pipeline, the impact of that was limited to Australia.

Additional reporting: Jared Lynch