Insurance software provider Ebix (EBIX) and an affiliate of Goldman Sachs (GS) agreed Thursday to terminate their proposed merger amid an investigation into alleged misconduct at Ebix.

Ebix shares tumbled $9.47, or 48%, to $10.25 in early morning trading.

The company said it received a letter Friday from the U.S. Attorney for the Northern District of Georgia, which is investigating allegations of misconduct. The U.S. Attorney’s office became aware of the allegations from media reports and pending shareholder class-action lawsuits against Ebix directors and officers.

The investigation is in its early stages, Ebix said, adding that it will fully cooperate with regulatory authorities.

 According to filings with regulators, class-action suits have been filed against Ebix and allege false statements in earnings reports, SEC filings, press releases and other public statements that purportedly caused shares to trade at inflated prices.

“We believe the allegations in the class-action suits are without merit,” Ebix Chairman and Chief Executive Robin Raina said in a statement. “We want to thank Goldman Sachs for their interest in acquiring Ebix and we are naturally disappointed that we could not complete a transaction at this time.”

Ebix said there will be no termination fees paid by either company, while both parties and certain Ebix shareholders agreed to release each other from all claims related to the terminated merger.

Its board will continue to evaluate strategic options, Ebix said.

In May, a Goldman Sachs affiliate agreed to buy Ebix for about $780 million. Ebix said at the time that the deal was valued at a total of $820 million including the assumption of debt.

Ebix, which provides software and e-commerce services for insurance and financial companies, defended its financial reporting back in February, when its shares fell in response to a post on a financial blog that questioned its accounting.

It called the post an “unsubstantiated report” and said management, “to the best of its knowledge,” believed the company’s reporting was accurate and complied with requirements set by the Securities and Exchange Commission.

Goldman Sachs was trading 1.1% lower at $159.71.

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