In court on Monday (20 November) morning, counsel for the Australian Securities and Investments Commission (ASIC), Jeremy Giles SC, said the technology company – which provides investigative analytics and intelligence software worldwide – “lost sight of the need to inform the market” in two ASX announcements.

Nuix allegedly disclosed misleading or deceptive misstatements in the February and March 2021 ASX announcements by including forecasts for statutory revenue and annualised contract value (ACV), which had originally appeared in the 2021 financial year prospectus.

At the time of these announcements, ASIC alleged Nuix was aware the ACV was “likely to be materialised below forecast”.

As a result, the market was misled and the board of directors were in breach by causing or otherwise permitting the contraventions.

ASIC also alleged Nuix breached its continuous disclosure obligations by failing to disclose its half-year financial year ACV results; for not making corrective disclosures to the ASX announcements; and for failing to announce a downgrade after the ACV and statutory revenue had been reforecast.

Mr Giles told the Federal Court the reforecast projection went to the board on 9 April and was disclosed on 13 April, during which time he alleged, “what went wrong in that stage is a whole series of debate about what is to go into the (ASX) announcements”.

“The expectation is that the procedures or mechanics are in place to act promptly and without delay,” Mr Giles said.

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“Our point in drawing attention to having the mechanisms in place is, in effect, noting that the answer is not ever going to be ‘hang on, this is a real problem that we hadn’t foreseen’. The mechanisms should have managed that when it happened.”

Mr Giles added there were “other solutions”, including “withdrawing guidance if one is no longer sufficiently confident in holding it … and going into a trading halt”.

The hearing continues.