City regulator intervenes as Burford alleges market manipulation

City regulator intervenes as Burford alleges market manipulation

City regulator intervenes as Burford alleges market manipulation

Woodford holds a 7% stake in Burford, although the rise in its share price prior to Muddy Waters' allegations was so meteoric - it jumped from £2 to £20 a share between 2016 and 2018 - that it's likely that Woodford investors are still ahead.

"It strains credulity to believe that a decline on the order of hundreds of millions of pounds in market capitalization was driven exclusively by actual trading amounting to a few hundred thousand pounds absent market manipulation", Burford said.

In a statement today, Bogart said: "Burford's market-leading business today is the same as Burford was a week ago". They then repeat this process, which brings down the share price without any shares being sold.

Burford shares tanked last week after U.S. research firm Muddy Waters accused the company of "egregiously misrepresenting" its returns and "the state of its overall business".

Layering is similar to spoofing, the difference being that traders place sell orders above the current offer price.

Shares in Burford fell again on Monday, down 5% to 803p, although this is well above the lows of just over 400p seen last week. "That is wrong and that is illegal".

Muddy Waters issued a brief statement in response, claiming that "the only manipulation is that of Burford's return metrics, accounts, and disclosures".

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. Fellow short-seller Gotham City Research - which notoriously helped sink technology provider Quindell in 2014 - has since added pressure by suggesting Burford was 'inappropriately financed'. "We will continue to make enquiries using the wide range of data and resources at our disposal", it said in a statement.

Burford today (12 August) said in a statement that a preliminary finding of its analysis of trading shares last week displayed 'evidence consistent with illegal market manipulation.' The statement came after more than £1bn was wiped off the company's value last week after San Francisco-based Muddy Waters published a report suggesting Burford was 'a flawless storm for an accounting fiasco'. "That mismatch between price movement and executed orders is consistent with market manipulation". London corporate partner Christopher Mort and white-collar partner Ali Sallaway will lead for Freshfields Bruckhaus Deringer and New York-based litigation partner Michael Birnbaum will lead on the matter from Morrison & Foerster's side with Denver-based partner Scott Llewellyn.

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