Burford Loses 'Market Manipulation' Claim Against London Stock Exchange
The litigation funder claimed it had been the victim of "illegal market manipulation".
May 15, 2020 at 06:24 AM
3 minute read
London's High Court
Burford Capital has failed in its claim against the London Stock Exchange (LSE) that it had been the victim of market manipulation, after its share price plummeted last year.
Last August, the litigation funder's share price tumbled following what the firm referred to as a "short-selling attack" by U.S. research firm Muddy Waters. More than $1.2 billion was wiped off Burford's value, with shares dropping as low as 64%.
According to the judgment, Burford claimed that is was "strongly suspicious" that "actionable misconduct by way of market manipulation was responsible for the fall in the share price".
Burford then claimed that it fell to the LSE to provide "assistance" to the company in such a scenario, and sought an order requiring the LSE to provide the identities of those involved in trading over two days in August that might have led to the share price crash. The LSE refused, arguing there was no evidence of misconduct, and that such information was confidential, following which Burford sought damages.
However, in handing down its judgment on Friday, London's High Court concluded that there was "no good arguable case that unlawful market manipulation occurred" and that the London Stock Exchange was not required to provide the assistance sought as there was not "a good arguable case of wrongdoing".
Quinn Emanuel Urquhart & Sullivan represented Burford, with counsel from Brick Court Chambers' Jasbir Dhillon QC and Jonathan Dawid, while the LSE turned to Bryan Cave Leighton Paisner, assisted by Andrew Green QC, Thomas de la Mare QC and Harry Adamson of Blackstone Chambers.
A spokesperson for the London Stock Exchange Group said in a statement: "The London Stock Exchange welcomes the court's ruling on the application for the disclosure of confidential trading data made by Burford.
"The Financial Conduct Authority is the U.K. competent authority for investigating allegations of market abuse, with access to data from the widest range of sources. London Stock Exchange provides any information the FCA requires from it for the purposes of their investigations," the statement added.
The loss is just the latest body blow to the funder, which last week was again the target of an attack by Muddy Waters, which this time claimed the firm had manipulated its 2019 financial results.
Quinn declined to comment.
Burford did not respond to requests for comment.
With reporting by Meganne Tillay.
Read more
Burford, Quinn Emanuel Make Case for Manipulation in Litigation Funder's Stock Plunge
Quinn Emanuel, MoFo Advising Burford Following 'Market Manipulation'
Burford Accused of Manipulating 2019 Financial Results
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