Class action against global litigation funder dropped

The funder also said that it still intends to list in the US, either on the New York Stock Exchange or the Nasdaq

Class action against global litigation funder dropped

Litigation funder Burford Capital revealed Tuesday that the securities class action filed against it in the US has been dropped by shareholder plaintiffs.

“Burford is pleased to report that the US securities class action against Burford filed in August 2019 has been withdrawn by the plaintiffs and dismissed in its entirety. There is no litigation pending against Burford at present other than ordinary course skirmishing within a small number of ongoing funded investment matters,” the company said.

The shareholders alleged that Burford misled investors about the company’s performance. The lawsuit echoed accusations earlier made by US-based short seller Muddy Waters, which is holding firm on its allegation.

“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,” a Muddy Waters spokesperson said, according to The Law Society Gazette in the UK.

Despite a rise on news that the class action has been dismissed, Burford’s share price in London is still well below its heights last year before the allegations levied by Muddy Waters. The company said, however, that it still plans to list in the US.

“As previously announced, Burford plans either to add a US listing on the New York Stock Exchange or NASDAQ for trading in its ordinary shares or to migrate to the London Stock Exchange Main Market,” it said.

The company is currently listed on a junior market of the London Stock Exchange, which was one of the criticisms from Muddy Waters, which said that the listing on that particular market meant disclosure requirements on Burford were not as extensive.

Burford has maintained that the claims made by Muddy Waters had inaccuracies and “fallacious insinuations.”

The litigation funder has also said that it has revamped its management, which had been promised to investors after the attack on the company. Aviva Will and David Perla have been appointed as joint chief operating officers, while Craig Arnott has been named as deputy chief investment officer.

Burford, which has tasked general counsel Mark Klein to also take on the role of chief administrative officer, said that it is looking for two new independent board members to replace David Lowe and Sir Peter Middleton, who will leave the board in May 2020 and May 2021, respectively.

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