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id: 665, Created by Stan Vick, Scout
Nutanix, Inc. (NTNX) Misconduct Case
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- Nutanix disclosed improper use of certain software and that it does not expect to timely file its Quarterly Report with the SEC.
- $NTNX price fell 7.89%, injuring Investors.
- Investors suspect Nutanix & its Leaders of misleading and negligence which led to investment losses
On March 6, 2023, Nutanix (NTNX) reported that “Company management discovered that certain evaluation software from one of its third-party providers was instead used for interoperability testing, validation, and customer proofs of concept over a multi-year period.” Due to an ongoing Audit Committee investigation into the matter, Nutanix stated that “it does not expect to be able to timely file its Quarterly Report”
During an earnings call with investors and analysts, when asked to clarify why using evaluation software for interoperability testing, validation, and customer proofs of concept would incur additional expenses, Nutanix’s CEO Rajiv Ramaswami explained that the Company would be required to pay the cost of using the software beyond the scope of its intended evaluation usage.
On this news, the $NTNX price fell 7.89%, injuring Investors.
Then, on March 16, 2023, Nutanix issued a press release announcing that, on March 15, 2023, “the Company received a standard notification letter from Nasdaq stating that, because the Company has not yet filed its Quarterly Report on Form 10-Q for the quarter ended January 31, 2023, the Company is not in compliance with Nasdaq Listing Rule 5250(c)(1), which requires timely filing of all required periodic financial reports with the SEC.”
Taking appeared facts into account, Investors have reasons to suspect Nutanix and its Leaders of misleading and failing to disclose that:
- the Company maintained deficient internal controls relating to its use of licensed software and expense management;
- the Company improperly used third-party evaluation software for business purposes over a multi-year period;
- investigation and remediation of the foregoing—i.e., by paying vendors the full cost to use their software for business purposes—would cause the Company to incur significant expenses;
As a result, the Company’s public statements were materially false and misleading at all relevant times.
Failure to Disclose,
Shock Event Date
06 March 2023
12 April 2023
Lead Plaintiff Deadline
13 June 2023