The co-head of corporate intelligence at Burford has been accused of unlawfully trading confidential documents for a sex tape. The litigation funder says the case is meritless. But the news is troubling on a couple of levels. First, it will worry anyone legitimately engaged in bartering secret data for salacious recordings. If true, the allegations could bring the whole profession into disrepute.

There is a second problem, more material for investors in shares that collapsed after criticism by short seller Muddy Waters. Why does an investment fund need a corporate intelligence boss? Daniel Hall’s job title may just mean he is good at pub quizzes. But it could imply, however wrongly, that he is a private detective. Perceptions would deepen that Burford is a very odd listed group.

Big companies rarely have PIs on the payroll, although they may hire them for projects. Lex knew one whose duties included covertly collecting DNA and doing accountancy checks. Burford’s numbers would have intrigued him. Profits have soared thanks to non-cash revaluations of cases in which Burford invests. Cash outflows have surged too.

Muddy’s pugnacious take on Burford’s numbers forced its share price down 56 per cent over two days this month. Since then, the company and the short seller have been swinging at one another like boxers. Burford commissioned a report claiming share trading had been “consistent with market manipulation”, only showing, perhaps, that high-frequency traders were around. Muddy paid for analysis claiming Burford used “aggression, evasion and persuasion”, as if litigation specialists rarely did.

This all leaves Burford’s shares 42 per cent lower. They are still only for the brave. Burford is trying to normalise. It has taken the principled decision, for example, to stop employing the chief executive’s wife as finance director. But litigation remains one of the most alternative of assets. It is doubtful whether specialist funds belong on the stock market.

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