Finance firm Burford Capital caught up in sex tape claim

Oscar Williams-Grut
Senior City Correspondent, Yahoo Finance UK
The allegations have been made in the UK's high court. Photo: PA

Embattled Burford Capital (BUR.L) has been caught up in a complex legal battle in London’s high court involving a Venezuelan business tycoon and a Russian shipping company.

The legal spat includes an accusation that a senior executive at London-listed Burford unlawfully traded confidential documents for a sex tape. Russian shipping business Novoship has made the claim against Daniel Hall, Burford’s co-head of global corporate intelligence, asset tracing, and enforcement.

Novoship alleges in its high court filing that Hall was given access to confidential documents but then traded some of them for a sex tape, according to the Financial Times. The sex tape allegedly related to American oil billionaire Harry Sargeant III, who Hall was investigating separately, according to the FT. Novoship is pursuing Burford for $91m (£74.9m) in the case.

READ MORE: Burford Capital crashes 60% after attack from US short seller Muddy Waters

The case against Burford and Hall comes as Novoship faces its own litigation from Venezuelan shipping magnate Wilmer Ruperti, who alleges breach of a 2016 settlement.

A spokesperson for Burford told Yahoo Finance UK: “It is not uncommon for Burford to find itself involved in litigation relating to matters that it has financed, and this case is no exception; this is simply part of Burford’s business.

“This is not a case against Burford; rather, the claim is brought by Wilmer Ruperti against Novoship, and Burford’s only involvement is that Novoship has claimed that if it is found liable to Ruperti then Burford should step in and indemnify it.

“Burford believes that the main claim here is meritless and that Novoship’s indemnity claim is also meritless, and the subject of a prior litigation release.”

The spokesperson declined to comment on the specific allegations about Hall trading documents for a sex tape.

READ MORE: Under-fire Burford Capital rebounds after 'false and misleading' short-seller attack

Burford specialises in litigation financing, putting up money to fund legal cases in return for a share of potential winnings. It also operates a “asset recovery and enforcement business,” which Hall runs. This part of the business specialises in turning “unpaid judgments from a commercial litigation or arbitration award... into available capital.” Burford’s website states that methods used to do this include using “human intelligence to gather actionable intelligence on judgment debtors.”

The allegations come as Burford is already battling to defend its reputation. Muddy Waters Research, a well-known US short-seller, published a 25-page report on the company at the start of the month alleging it was “arguably insolvent” and raising issues with accounting and governance.

Burford called the allegations “false and misleading” and has accused Muddy Waters, which is betting Burford’s share price will fall, of market manipulation. Muddy Waters has denied this claim.

Shares in Burford are over 40% lower than where they were trading before the Muddy Waters report.

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Oscar Williams-Grut covers banking, fintech, and finance for Yahoo Finance UK. Follow him on Twitter at@OscarWGrut.

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