Thursday 22 August 2019 9:37 am

Burford executive accused of exchanging documents for sex tape in lawsuit

A senior executive at Burford Capital has been accused of unlawfully trading “sensitive” documentas for a sex tape in a $91m (£75m) lawsuit in the High Court.

The lawsuit marks the latest battle for the troubled litigation funder, which was subject to a short attack by US firm Muddy Waters earlier this month. 

Daniel Hall, co-head of Burford’s global corporate intelligence, asset tracing and enforcement business, is alleged to have supplied confidential documents he obtained while working for Novoship, a Russian shipping group.

Read more: US watchdogs receive allegations of manipulation over Burford Capital share price

Hall is alleged to have exchanged these “sensitive” documents for “video material of a sexual nature” relating to a US oil billionaire, Harry Sargeant III, the Financial Times reported. Hall is said to have been investigating Sargeant’s assets for another client.  

Novoship are suing Hall and Burford over the alleged trade of information. The lawsuit is part of a wider case, in which Venezuelan shipping tycoon Wilmer Ruperti is attempting to sue Novoship for up to $91m for allegedly breaching an earlier legal settlement. 

Lawyers for Novoship said in a High Court claim that Hall and Burford “unlawfully made use of those documents otherwise than for the limited purpose for which they had been given to him”. 

Novoship is arguing that if Ruperti’s claim against it is successful, Burford should compensate it for the full amount. 

In court documents submitted by Burford, lawyers for the company said it was not liable to Novoship for any loss or damages, and said: “the relevant information was in the public domain and was otherwise not private and confidential”.

Burford chief executive Christopher Bogart dismissed both Novoship’s claim and the wider case as “meritless” in a statement.

“It is not uncommon for Burford to find itself involved in litigation relating to matters that it has financed, and this case is no exception; this is simply part of Burford’s business,” he continued. 

“This is not a case against Burford; rather, the claim is brought by Wilmer Ruperti against Novoship, and Burford’s only involvement is that Novoship has claimed that if it is found liable to Ruperti then Burford should step in and indemnify it.”

“Burford believes that the main claim here is meritless and that Novoship’s indemnity claim is also meritless, and the subject of a prior litigation release.” 

Hall declined to comment on the case. Lawyers for Novoship also declined to comment.

Read more: Burford Capital ditches finance chief in response to activist pressure

Burford has been fighting to limit the damage inflicted by Muddy Waters’ short attack. The US shortseller released a scathing report into Burford earlier this month, calling it “a poor business masquerading as a great one” and criticising aspects of its accounting and corporate governance. 

Burford later said it had identified evidence consistent with “illegal market manipulation” of its shares in the run up to the attack. Financial regulators in the UK and the US are investigating the claims. 

Burford’s shares were down just over three per cent in morning trading to 788.5p.

Main image credit: Getty