August 12, 2019 / 8:32 AM / 7 days ago

Britain's FCA looking into Muddy Waters short attack on Burford Capital

LONDON (Reuters) - Britain’s financial markets regulator said it is making “wide-ranging enquiries” into the circumstances surrounding a short-selling report on litigation finance company Burford Capital (BURF.L) by U.S. activist Muddy Waters.

On Monday, Burford issued a statement to the stock exchange saying it had found evidence of suspect trading patterns last week, around the time Muddy Waters issued its report challenging the company’s accounts.

In response, a spokeswoman for the Financial Conduct Authority said it had been “aware of these matters since the first tweet and price movements on Tuesday of last week and at that point we began undertaking wide-ranging enquiries.

Burford’s shares fell 19% on August 6, the day short-seller Muddy Waters tweeted about a forthcoming short attack against an unidentified company, and dived a further 46% on August 7, when Muddy Waters released a report criticising Burford’s accounts and management.

“We will continue to make enquiries using the wide range of data and resources at our disposal,” the FCA added.

Reporting by Simon Jessop; Editing by Rachel Armstrong

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