U.K.-based litigation finance firm Burford Capital Ltd. said it has found trading activity consistent with material illegal activity around the time its share price fell when it was shorted by a U.S. hedge fund.
The company's share price tumbled 46% on Aug. 7, having fallen by nearly 20% on Aug. 6 after a tweet from hedge fund Muddy Waters LLC saying it would announce a new short position. Muddy Waters also published a report criticizing Burford's accounting practices.
Burford said it is considering next steps.
The U.K. Financial Conduct Authority is looking into Burford's claims, The Independent reported Aug. 12, citing a spokesperson.