Burford abandons market manipulation claim
Gazette reporter, 15 May 2020
Burford Capital has abandoned a legal bid to prove its share price was illegally manipulated after being denied access to market information.
The embattled litigation funder said it does not intend to appeal a High Court ruling refusing an application to compel the London Stock Exchange to release trading data.
Burford has made a concerted effort to pursue claims for market manipulation following an August 2019 short attack against its shares. The Guernsey-registered and New York-based business came under assault when a US shareholder activist, Muddy Waters, published an apparently damning analysis. Muddy Waters claimed Burford was ‘arguably insolvent’ and described its governance as ‘laughter-inducing’, allegations which were strenuously denied by Burford. Muddy Waters renewed its attack on Burford earlier this week, accusing it of over-stating profits.
Burford retained an expert in market manipulation, Professor Joshua Mitts of Columbia University, to pursue its claims. He found that ‘market manipulation in the form of spoofing and layering caused an artificial decline in Burford’s share price’. However, the court decided this conclusion was merely ‘speculative’.
Sitting in the Commercial Court, Mr Justice Andrew Barker ruled in Burford Capital Ltd v London Stock Exchange Group that it was ‘impossible’ to determine from the data Mitts reviewed whether any share order events were or may have been manipulative.
