Burford set for second onslaught

BURFORD Capital is braced for a fresh assault after it emerged that yet more damaging dossiers from American short-sellers could be circulated in the coming days.

A critical 25-page report targeting Burford Capital from US-based investment house Muddy Waters wiped £1.7 billion off the litigation funder’s value on Tuesday and Wednesday last week.

Muddy Waters alleged Burford had been ‘egregiously misrepresenting’ its return on investments, is ‘arguably insolvent’ and is ‘at high risk of having a liquidity crunch’.

The stock recovered some ground after Burford Capital rebutted the claims. But Carson Block, founder of Muddy Waters, is reported to be preparing a fresh attack this week. It has also been rumoured that Gotham City – a US research firm run by Dan Yu – will release its own dossier on Burford Capital.

Gotham City previously targeted Quindell, which was a darling of London’s Alternative Investment Market. Burford was the biggest firm listed on AIM and valued at £3 billion until last week. The shares closed at £8.50 on Friday, a 40 per cent fall on the week.