Australia's Federal Court has dismissed the Australian Securities and Investments Commission's long-running legal pursuit of data analytics firm Nuix (ASX:NXL).
Delivering his judgment on April 23, Justice Scott Goodman rejected all allegations of misleading or deceptive conduct, subsequently ordering the regulator to pay the company’s full legal costs.
The ruling concludes a saga that began following Nuix's $1.7 billion float in late 2020, after which its market value plummeted amid downgraded revenue forecasts.
ASIC's case, initiated in September 2022, contended that Nuix and its directors had breached continuous disclosure obligations by reaffirming prospectus targets in early 2021 despite allegedly knowing they would be missed.
The watchdog specifically targeted former chief executive Rodney Vawdrey and other board members, claiming they had failed in their directorial duties.
However, Justice Goodman found that Nuix possessed "reasonable grounds" for its financial forecasts, noting that the figures were prepared by "qualified, informed, experienced, and competent" staff.
The court accepted the directors' arguments that there was no reason to doubt a second-half recovery at the time of the February 2021 reaffirmation, despite a disappointing initial half-year performance.
While Nuix was eventually forced to slash its revenue projections in April 2021, the court deemed the earlier optimism legally defensible.