Burford alleges manipulation of shares around Muddy Waters attack

Burford alleges manipulation of shares around Muddy Waters attack

A forensic examination of detailed data by Burford and its expert, Professor Joshua Mitts of Columbia University, "discloses trading activity consistent with material illegal activity", the litigation-finance firm said in a statement Monday.

Burford also said it was also considering legal action.

Christopher Bogart, chief executive of Burford, said the company's "market-leading" business is the same as it was a week ago.

Responding to the statement, Muddy Waters said: "The only manipulation is that of Burford's return metrics, accounts, and disclosures".

Gotham shorted London-listed Burford previous year, though the firm doesn't have a short position in the company at the moment, according to the statement. "This is entirely normal and there is no market manipulation".

Finding what it believes to be evidence of illegal market manipulation of its shares last week, Burford C. They then repeat this process, which brings down the share price without any shares being sold.

Both spoofing and layering were explicitly banned in the 2010 Dodd-Frank Act in the United States and are considered as market manipulation under the United Kingdom's Financial Services and Markets Act 2000. Layering involves placing and cancelling orders at higher prices in an attempt to give the impression of high trading volumes.

In what is fast becoming one of the most extraordinary financial battles in recent years, Muddy Waters - a so-called short seller, which makes money when share prices fall - made a string of accounting and poor management allegations against Burford, a business that specialises in providing funding for lawsuits.

A spokesman for the U.K. Financial Conduct Authority said the regulator "is aware of these matters" and has been undertaking "wide-ranging enquiries", which will continue.

"We think Burford is inappropriately financed", Gotham founder Daniel Yu said in an emailed statement. During these periods, executed sell orders totalled a mere GBP 186,000. Spoofing is the placement of a high volume of trading orders at a price equal to or better (i.e. lower) than the best-bid-best-offer price and the subsequent cancellation of these orders to move the price in a given direction without actually concluding any trades.

At 1545 BST, Burford share were down 10.4% to 762p.

Burford's legal team consists of Quinn Emanuel's London senior partner Richard East and partner Khaled Khatoun, the firm's NY partners Andrew Rossman and Corey Worcester, as well as Washington, DC-based Michael Liftik and group managing partner John Quinn.

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