The Australian Securities and Investments Commission (ASIC) is conducting inquiries into whether four international banks misrepresented investor demand during the initial public offering (IPO) of artificial intelligence company Firmus. The banks under scrutiny are Morgans, Bank of America, JPMorgan, and Morgan Stanley.

ASIC chair Sarah Court addressed the matter during a Senate estimates hearing, confirming the commission’s interest in how the banks documented investor interest and managed potential conflicts. Firmus had aimed to raise approximately US$5.5 billion (A$7.8 billion) through the IPO at $11 per share, valuing the company at around $44 billion. However, the flotation was withdrawn from the Australian Securities Exchange (ASX) amid investor concerns over the company’s valuation, revenue prospects, and cash flow.

Had the IPO proceeded at the proposed price, it would have been the largest listing in Australia since Telstra’s in 1997 and valued Firmus on par with Woolworths. Senator David Sharma questioned ASIC’s chair about an email reportedly sent by Morgans brokers to clients, which highlighted substantial demand for billions of dollars’ worth of Firmus shares and urged prospective investors to act quickly. Court confirmed ASIC had reviewed the communication.

While ASIC has not yet initiated a formal investigation, Court noted that lead managers are obliged to have a responsible basis for any representations made regarding investor demand. The commission’s inquiries will consider whether these obligations were met.

Senator Sharma also raised media reports suggesting that brokers and their clients had invested heavily in Firmus during early fundraising rounds. Concerns were voiced that these holders might have sold shares during the IPO, potentially inflating demand, promoting valuations, and generating significant profits.

Firmus was co-founded by Oliver Curtis, an Australian billionaire who was previously incarcerated for insider trading more than ten years ago. Curtis is married to public relations executive Roxy Jacenko. The ASIC inquiry continues as the watchdog seeks to determine whether any breaches occurred in the lead-up to the IPO withdrawal.