A class action lawsuit has been filed in United States District Court, Eastern District of New York, on behalf of purchasers of Burford Capital Limited securities between March 18, 2015 and August 7, 2019, inclusive (the “Class Period”).
If you purchased securities of Burford Capital Limited (“Burford Capital” or the “Company”) during the Class Period and suffered losses, please click Join a Securities Class Action to participate in the lawsuit or contact either John Kehoe, Esq., (215) 792-6676, Ext. 801, [email protected], or Michael Yarnoff, Esq., (215) 792-6676, Ext. 804, [email protected], [email protected], to learn more about the lawsuit or the securities investigation.
Burford Capital shareholders have 60 days from August 21, 2019 to move the Court to be appointed lead plaintiff.
According to the class action complaint, the Burford Capital Defendants made false and/or misleading statements and/or failed to disclose that: (1) Burford Capital has been manipulating its metrics, including return on invested capital (“ROIC”) and internal rate of return (“IRR”), to create a misleading picture of investment returns to investors; (2) these manipulations hid the fact that the Company is at high risk for a liquidity crunch and is already arguably insolvent; and (3) as a result of the aforementioned misconduct, Defendants’ statements about Burford Capital’s business, operations, and prospects were materially false and/or misleading and/or lacked a reasonable basis at all relevant times.
On August 7, 2019, The Wall Street Journal reported that “U.S. short-seller Muddy Waters accused the litigation-finance firm Burford Capital Ltd. . . . of poor governance and mismarking the value of legal cases it invests in, wiping around 50% off the value of the U.K. firm’s shares.”
The Wall Street Journal also reported that “Muddy Waters, headed by Carson Block, on Wednesday said Burford’s stock valuation and earnings are based on ‘meaningless’ metrics that the company manipulates. The firm released a report and video interview with Mr. Block making the claims at the start of London trading and the shares swooned.”
Additionally, The Wall Street Journal reported that “. . . Muddy Waters said Burford’s management stands to benefit from aggressively marking up the value of legal cases because it causes the stock owned by the company’s executives to rise in value. It criticized the company’s governance, including a lack of turnover on Burford’s board since it listed its shares in London in 2009.”
On this news, shares of Burford Capital dropped $5.90, or 42.45%, to close at $8.00 on August 7, 2019 and Burford Capital’s ADRs fell $6.15, or 43.93%, damaging Burford Capital investors.
Purchasers of Burford Capital securities during the Class Period who suffered losses are encouraged to contact either Michael Yarnoff, Esq., (215) 792-6676, Ext. 804, [email protected], [email protected] , or John Kehoe, Esq., (215) 792-6676, Ext. 801, [email protected], to learn more about the securities investigation.