Tuesday 7 January 2020 11:59 am

Burford Capital shares rise after US lawsuit against it is dropped

Litigation funder Burford Capital’s share rose this morning after it said a US lawsuit against it had been dropped.

Burford’s shares plunged over the summer after it was targeted by shortseller Muddy Waters which questioned its governance and accounting standards.

Today, Burford said a securities lawsuit filed in August following its share price drop had been withdrawn by the plaintiffs and dismissed in its entirety.

Read more: Burford left reeling as shortseller takes aim at business

“There is no litigation pending against Burford at present other than ordinary course skirmishing within a small number of ongoing funded investment matters,” the firm said.

Carson Block of Muddy Waters said: “None of what they have said today counters the fact that Burford Capital manipulates its performance metrics and abuses the latitude afforded it under fair value accounting.

“We would also caution anyone against interpreting the litigation dismissal as affirmation that there is no misleading conduct or wrong-doing at the company. It is nothing more than the reality of the US being overly litigious. Lawsuits get filed and dismissed all the time, which in this case is ironic, given Burford’s own contribution to the clogged toilet that is the US court system.”

Burford also said today it had shaken up its management, which it promised investors it would do in the aftermath of Muddy Waters’ criticism of its governance.

The funder has appointed Aviva Will and David Perla as its co-chief operating officers and Craig Arnott as its deputy chief investment officer.

Its general counsel Mark Klein will also take on the role as chief administrative officer.

Read more: Muddy Waters accuses Burford Capital of deceiving investors

Burford said it had engaged headhunter Korn Ferry to lead its search for two new independent board directors to replace David Lowe who will leave the board in May 2020 and Sir Peter Middleton who will leave the board in May 2021.

The company also said it was ready to start the formal process of seeking a US listing, which it promised to do after criticism from Muddy Waters about its decision to remain solely listed on Aim, despite being by far the largest company on London’s junior growth market.

Burford’s shares rose 2.5 per cent to 701p today. In July, prior to the attack from Muddy Waters, Burford’s shares were trading above 1,600p.

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