A New York firm specialising in investor rights action has announced that it has filed a lawsuit on behalf of stockholders hit by the fall in Burford Capital shares following a critical report on the litigation funder earlier this month. Rosen Law Firm said it seeks to recover damages for Burford investors under federal securities laws.
The action alleges that Burford ’made false and/or misleading statements’ on its returns and manipulating metrics to hide ’the fact that the company is at high risk for a liquidity crunch and is already arguably insolvent’.
It also alleges that ’Defendants’ statements about Burford’s business, operations, and prospects were materially false and/or misleading and/or lacked a reasonable basis at all relevant times. When the true details entered the market, the lawsuit claims that investors suffered damages.’
Burford denies making false statements and being in financial difficulty.
Rosen’s announcement does not state whether the litigation will be externally funded.
In another development, the short-seller responsible for the attack on Burford’s shares, Muddy Waters, today described as ‘depraved’ Burford’s statements to the market about the value of ongoing litigation.