Burford Capital share price: what next as US regulators receive share ‘spoofing’ allegations
The legal financier is under investigation by regulators on both sides of the Atlantic over allegations of market manipulation in the trading of share in litigation.
The US Securities and Exchange Commission (SEC) and the US Department of Justice (DoJ) received market manipulation allegations regarding the collapse of litigation financier Burford Capital, according to a report by the Sunday Times.
Claims of ‘spoof’ trading, whereby a trading order is submitted only to be cancelled to affect the share price, were first levied against Burford Capital by the Financial Conduct Authority (FCA).
Short seller Muddy Waters says Burford Capital lied to investors
Last week, short seller Muddy Waters released a report compiled with the assistance of ex-CIA operatives alleging that Burford Capital’s management lied to investors on multiple occasions.
Muddy Waters’ report claimed that Burford Capital was ‘a poor business masquerading as a great one’ and accused its management of engaging in questionable accounting practices.
The damning report saw Burford Capital’s share price to plummet more than 60%, with the stock later recovering, trading 40% lower than prior to the news breaking.
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Allegations hinder Burford Capital’s US listing plans
Burford Capital listed on the London Stock Exchange’s (LSE) AIM market in 2009, with it counting Invesco Asset Management and Neil Woodford among its largest shareholders.
The legal financier had planned to list on the US market too, but this process will likely be hindered by the SEC and DoJ after receiving the allegations made against the company.
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