Changes to a governance regime attacked as 'laughter-inducing' have failed to impress critics of stock exchange-listed litigation funder Burford Capital. The company, under scrutiny since a short attack on its shares, announced a package of measures including the replacement of its chief financial officer, who is married to the chief executive. 

The announcement lifted Burford's shares, which trade on the junior alternative investment market (AIM) of the London Stock Exchange. However short-seller Muddy Waters, whose analysis last week plunged Burford into crisis, described it as a 'farce'.

Burford's roller-coaster ride has prompted wider scrutiny of the fast-growing litigation funding market, including questions about whether its business model is appropriate for a publicly traded company. It is the largest stock listed on AIM, which imposes less stringent governance requirements than the main market, requiring only that members adhere to the rules in their home jurisdiciton. In Burford Capital's case, this is Guernsey.

Yesterday's announcement stated that Burford is in the process of procuring a second listing, with New York as the first choice. That would make it the first litigation funder to be listed in the US. The announcement conceded:  'There are some preliminary legal matters to resolve... and that process may take several months.

In the meantime, banker Jim Kilman will take over from Elizabeth O’Connell, wife of chief executive Christopher Bogart, with 'immediate effect'. Two long-serving board members will be replaced. Sir Peter Middleton, chairman of Burford, said: 'Shareholders have clearly spoken and we have listened, just as Burford has throughout its existence. We trust that these governance enhancements operate to bolster investor confidence in Burford as it enters its next era of growth and success'.

However Muddy Waters' Carson Block commented: 'The notion that appointing Mr. Kilman as CFO will substantively improve governance is a farce. It is clear from this that Burford is more interested in imposing fig leaves than real guard rails. Given the complexity of Burford’s accounting, the CFO should be an accountant who has demonstrated a strong commitment to ethics. Investment bankers don’t often qualify on that front.'

Burford shares opened this morning at 880p.