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Nuix (ASX:NXL) - Chairman, Jeffrey Bleich
Chairman, Jeffrey Bleich
Source: Griffith University
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  • Nuix (NXL) confirms two investigations by Australia’s market watchdog into allegations of insider trading and dealing with the proceeds of crime
  • An affidavit accuses former CFO Stephen Doyle — along with his brother Ross and father Ronald — of trading in Nuix shares using insider knowledge
  • ASIC says in the five weeks leading up to Nuix’s disastrous half-year results, the Doyles collectively sold two million shares
  • They pocketed $17.8 million and saved more than $5.7 million should they have been sold on the day the results were revealed
  • A separate investigation is also underway, examining three years’ worth of financial accounts and Nuix’s IPO prospectus
  • Shares in Nuix are currently down 12.99 per cent to $2.21 as of 1:06 pm AEST and have fallen more than 74 per cent since the start of this year

Nuix (NXL) has confirmed two investigations by Australia’s market watchdog into allegations of insider trading and dealing with the proceeds of crime.

The announcement, released this morning, follows an affidavit filed by the Australian Securities and Investments Commission (ASIC) that shows former CFO Stephen Doyle — along with his brother Ross and father Ronald — is accused of trading in Nuix shares using insider knowledge between January 22 and February 12, 2021.

It’s alleged that Stephen notified Ross of Nuix’s poor financial performance prior to the release of its half-year report on February 26, which included a downgraded profit estimate that ultimately led to a 32 per cent drop in the software provider’s share price.

That information led Ross to offload 1.8 million shares held via Black Hat — a company set up in Singapore two weeks before Nuix’s IPO on December 4 at $5.31 per share. By January 22 the shares had almost doubled in value, hitting a peak of $11.86.

ASIC alleges that in the five weeks leading up to the release of the half-year results, the Doyle brothers collectively sold two million shares from the Black Hat account, pocketing $17.8 million and saving more than $5.7 million should they have been sold on the day the results were revealed.

The affidavit prevents Ross from returning to Switzerland after he applied for a travel exemption on June 27, just days after raids were carried out by ASIC and the Australian Federal Police. The application was denied and Ross will be examined by ASIC this week.

A separate investigation is also underway, examining three years’ worth of financial accounts and whether Stephen filed Nuix’s IPO prospectus last year despite knowing that it contained false and misleading information.

“ASIC is investigating, among other things whether Stephen Doyle gave to the ASX, or permitted to be given to the ASX, a prospectus including information about the forecast revenue of Nuix for the financial year ended 30 June 2021 that was false or misleading in a material particular, without having taken reasonable steps to ensure that it was not false or misleading,” the affidavit said.

In a statement this morning, Nuix chairman Jeffrey Bleich said the company is “genuinely disturbed by the allegations concerning Mr Doyle and will fully assist ASIC in getting to the bottom of that matter”.

Shares in Nuix are currently down 12.99 per cent to $2.21 as of 1:06 pm AEST and have fallen more than 74 per cent since the start of this year.

NXL by the numbers
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