Risk & Compliance

Burford Capital CEO’s Wife Steps Down as CFO

Elizabeth O'Connell is taking another job at the litigation finance firm amid investor concerns over her independence.
Matthew HellerAugust 16, 2019

Litigation finance firm Burford Capital has reassigned its CFO after a hedge fund raised concerns that she could not function independently because she is married to Burford’s chief executive.

Muddy Waters, a San Francisco-based fund that has shorted Burford’s stock, last week cited Elizabeth O’Connell’s relationship with Christopher Bogart as an example of the firm’s poor governance, saying it posed a conflict of interest and should alarm investors.

“In a situation so ripe for abuse, the very least the company could do is to have an independent CFO,” Muddy Waters said in a report.

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Announcing a board reshuffle on Thursday, Burford also said O’Connell had stepped down as CFO and would become its chief strategy officer.

“Concern has been raised about the fact that Burford’s CEO and chief financial officer are married,” the firm said in a news release. “We believe that concern is unjustified given Burford’s control structure and ignores Burford’s finance and accounting structure.”

But since “it is clear that investors would prefer an alternative CFO,” Burford said it had appointed Jim Kilman, its principal investment banker at Morgan Stanley, to replace O’Connell, effective immediately.

Carson Block, director of Muddy Waters, was not appeased. ““The notion that appointing Mr. Kilman as CFO will substantively improve governance is a farce … Burford investors would be much better served by a CFO from the outside who is untainted by Burford’s conduct to date,” he said.

O’Connell has worked at Burford Capital since its founding in 2009, starting as a managing director and being appointed CFO in December 2017. She has been married to Bogart since 1992.

As The Wall Street Journal reports, “Historically, public companies with executives who are married have prompted ethical questions.”

“It may have worked for 30 years, but that doesn’t mean it’s going to work for the next 10 years,” said Charles Elson, director of the John L. Weinberg Center for Corporate Governance at the University of Delaware. “It’s a bad idea and it always has been.”

Muddy Waters also accused Burford of murky accounting practices. Burford has called the fund’s report “false and misleading.”