Muddy Waters Short Wipes $2 Billion Off Burford Market Value (4)

Short-seller Muddy Waters targeted Burford Capital Ltd., driving the litigation-finance company’s stock down as much as 66% and piling pressure on fund manager Neil Woodford, a big Burford shareholder.

London-listed Burford overstates the returns it earns on its investments and has questionable financial reporting and governance, Muddy Waters, the research firm founded by Carson Block, said in a report on its website Aug. 7. Shares of Burford -- which counts Woodford Investment Management among its top holders -- had slumped by 19% Aug. 6 amid market speculation about Muddy Waters’ next target.

The “criticisms are without merit,” the New York-based ...