Burford Capital PLC (LON:BUR) has dropped its legal pursuit of US short-seller Muddy Waters after a High Court ruling went against the litigation fund specialist.
The court refused to give access to London Stock Exchange data that might have indicated market manipulation of its shares.
Burford produced expert evidence from Professor Joshua Mitts from Columbia University to support its application but this was dismissed as speculative by the court.
In a statement, the AIM-listed group, said: “Burford's goal in this proceeding was to obtain access to the information needed to assist shareholders in bringing claims for market manipulation, which Burford continues to believe occurred.
“Without that information, Burford is unfortunately not in a position to advance shareholder claims further.
“While Burford believes the Court's judgment is flawed as a matter of law and deprives shareholders of redress, there is also a limit to the level of effort that it is sensible and appropriate for Burford to expend, and thus Burford does not intend to appeal the Court's ruling.”
Burford Capital lost half of its value in a day last August when Muddy Waters, a fund run by famous short-seller Carson Block, claimed the AIM-listed firm was “egregiuosly mis-representing” its financial returns.
Burford dismissed Muddy Waters allegations and claimed the fall in its share price was down to illegal market manipulation using techniques such as ‘spoofing and layering’.
It estimated that almost £90mln of sell orders were placed and cancelled on 6 August – the day Muddy Waters tweeted about the company.
Earlier this week, Muddy Waters confirmed it still had a short position in Burford and launched another attack on the group's accounting methods saying it used had reclassification and redefinition to inflate cash receipts.
Burford shares were unchanged at 423.7p.