The All Ordinaries Index (ASX: XAO) is having a pretty lousy start to the week so far today. At present, the All Ords has lost 0.26%, putting it down to just over 7,610 points. But that’s nothing compared to the losses the Nuix Ltd (ASX: NXL) share price is suffering today.

Nuix shares are well and truly in the doghouse this Monday. The software analytics provider has crashed by a nasty 26.73% at the time of writing to $1.11 a share. That’s after the Nuix share price closed at $1.52 last Friday.

The company impressed investors only last week when it won a court case against its former CEO. Edward Sheehy was seeking up to $183 million in damages over a dispute from the issuance of options. But Nuix shares rocketed more than 40% when the Federal Court ruled in Nuix’s favour.

So what on earth is going on with Nuix that might have prompted such a dramatic revaluation from the market today?

Well, there’s been nothing new from the company itself.

But there is some speculation out today that Nuix might have lost a major client.

Nuix share price tanks amid ASIC speculation

According to reporting in the Australian Financial Review (AFR) today, the government’s corporate watchdog, the Australian Securities and Investment Commission (ASIC), is “expected to dump Nuix” from providing digital forensics and analytics services when the company’s contract is up for renewal next month.

ASIC is reportedly “keen to distance itself” from Nuix amid ongoing investigations into the company, including by ASIC itself.

It was only last September that ACIS announced that it was suing Nuix for breaching provisions of the ASIC Act and the Corporations Act.

It’s not just ASIC either, with other government departments such as the Australian Taxation Office (ATO) and the Australian Competition and Consumer Commission (ACCC) “likely to follow ASIC’s lead” in no longer requiring Nuix’s services.

So it could be this news that is rattling investors today. It’s arguably not a good look when government agencies are allegedly clamouring to find alternatives to a company’s services. Especially when the said company is the subject of investigations by those same entities.

Nuix has countered by telling the AFR that “its customer relationships remained strong” and that its customer churn rate, as of its November AGM, was 5.5%.

But clearly, investors have been rattled today.

Nuix is scheduled to report its half-yearly earnings results on Monday, 20 February so no doubt investors will be watching closely.

In the meantime, the Nuix share price is still up an impressive 70% in just 2023 to date. But Nuix shares remain down by more than 21% over the past 12 months.