Quinn Emanuel, MoFo Advising Burford Following 'Market Manipulation'

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Christopher Bogart, CEO, Burford Capital

Quinn Emanuel Urquhart & Sullivan, Morrison & Foerster and Freshfields Bruckhaus Deringer are advising litigation funder Burford Capital on its claim that it has been the victim of “illegal market manipulation.”

In a statement released this morning, Burford announced the preliminary findings of its analysis of the trading of its shares last week, after short-seller Muddy Waters said in a report that Burford was “a perfect storm for an accounting fiasco.”

More than $1 billion was subsequently wiped off the value of Burford, with shares dropping 64% at one point before rallying later in the afternoon.

In its statement today, Burford claimed it had “found evidence consistent with illegal market manipulation” as part of its analysis, referencing “spoofing and layering.”

It added that it had “made regulatory authorities and criminal prosecutors aware of these preliminary conclusions and Burford is considering its own options.”

Quinn’s team includes the firm’s managing partner, John Quinn, as well as New York partners Andy Rossman and Corey Worcester and Washington, D.C., partner Mike Liftik.

Morrison & Foerster litigation partner Michael Birnbaum is leading for the U.S. firm in its New York office.

Freshfields is fielding a team led by corporate partners Christopher Mort and disputes partner Ali Sallaway, while the Quinn team is being headed up by the firm’s London co-managing partner Richard East and partner Khaled Khatoun.

Muddy Waters, which researches publicly traded companies and takes investment positions that reflect its findings, had said Burford was ”a poor business masquerading as a great one,” adding that the company is “arguably already insolvent.”

Last week, Burford called Muddy Waters’ report ”false and misleading,” and the company’s CEO, Christopher Bogart, said the short-seller’s claims about Burford being insolvent were a “red herring.”

In a statement issued today, Muddy Waters said, “Spoofing and layering are issues that have arisen in the high-frequency and computer-driven trading world and Muddy Waters has neither the capability nor the incentive to engage in these practices. They have nothing to do with us.

“The only manipulation is that of Burford’s return metrics, accounts and disclosures. We posted an innocuous tweet the day prior to publishing our report. We were very surprised by the share price fall, so felt we had to de-risk our position given how significant a proportion of our fund it was until we fully understand what was happening. This is entirely normal and there is no market manipulation.”