What is Burford Capital doing for Wilmer Ruperti?

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    Readers of this site will know that Wilmer Ruperti is a topic of interest. To cut it short, Ruperti went from being a “tanker master”, to become the go-to-guy for all of PDVSA’s shipping needs. Quite a feat, assisted (as per Ruperti’s own claims) by Ali Rodriguez and Rafael Ramirez. In the process, of course, he made a fortune.

    Not long ago, Ruperti was mentioned as the funding source in the context of Nicolas Maduro’s narco nephews’ legal defence. Harvey Weinstein's lawyer, David Boies, took on the narco nephews -sentenced to 18 years for trying to import some 800 kilograms of cocaine into the U.S., and Ruperti admitted to have paid Boies’ fees.

    Then, there’s the issue of an American missionary, Joshua Holt, jailed in Venezuela. Better to link to AP for background. In that case, Ruperti is also using David Boies. According to AP, Ruperti’s involvement in Holt’s case was at the request of Bill Duker, a long time colleague and confidant of Boies.

    Duker’s actions aren’t gratuitous. For there is another affair in which Ruperti, Boies, and Duker are currently involved: PDVSA US Litigation Trust.

    The old regime at PDVSA -put in place by now disgraced, wanted and on the run Rafael Ramirez- set up a trust to bring legal action, against a former Ruperti employee along with some of the world’s largest energy trading houses. Conditions in the trust agreement are in clear breach of Venezuela’s Constitution. The trustees -Edward P Swyer and Vincent Stephen Andrews- are nothing but proxies of Boies and Duker. A shell called ALGAMEX is described -without further detail- as the source of funding for the trust.

    While this takes place however, PDVSA continues its commercial relationships with some of the defendants (Helsinge, Vitol, Glencore, Lukoil and Trafigura) that the litigation trust, set by PDVSA itself, is suing. For instance, leaked data shows that in March and April, Trafigura took delivery of nearly 2.5 million barrels of crude oil from PDVSA.

    Quevedo has availed close collaborator Hilda Cabeza to Boies, to discuss, among other things, standing of the trust. One of the signatories to the trust agreement, Venezuela’s Procurator General, Reinaldo Muñoz Pedroza, is reportedly to visit New York City to meet with Boies in late May.

    With the above framework, I have been digging on Ruperti’s activities, connections, legal wranglings, etc. In Latin American Investments Ltd v Maroil Trading Inc et al, Ruperti basically stands accused of misappropriating some $177 million, on the back of PDVSA’s breaches to trading and shipping agreements with companies and ships owned / controlled by the Sargeants' family businesses and Ruperti. If I made a correct interpretation of claim, Ruperti negotiated a settlement with PDVSA, on self and partners behalf, which, when he subsequently got, proceeded to pocket without telling his partners.

    Things get truly bizarre from here. From Novoship case in London, we learn of Andrew Longhurst, former CFO and disgruntled employee of Ruperti, who allegedly passed information regarding Ruperti’s assets to Daniel Hall, at the time an investigator with Focus Intelligence, that had been retained by the Russians for their legal disputes with Ruperti.

    In an affidavit by Benjamin Patrick Ogden, it is claimed that Hall pushed Longhurst for Ruperti’s evidence, till eventually an agreement was reached, whereby Longhurst would get his due -non-paid salaries owed to him by Ruperti- in an eventual settlement in the Novoship lawsuit against Ruperti.

    In the context of Hall dealings with Longhurst, a Nick Fairfax gets a mention. That would be Nicholas John Albert Fairfax, 14th Lord Fairfax of Cameron as per Wikipedia. The same Fairfax is described as Risk Management Strategist for Sovcomflot Group. Sovcomflot is the ultimate parent company of Novoship. Fairfax emailed an offer to “ring fence monies owed to Mr Longhurst by Maroil and by Mr Ruperti”, in the eventuality that intel provided by Longhurst would prove useful to Novoship.

    Crucially, Fairfax offered to return all information to Longhurst, if Novoship succeeded in its claims against Ruperti “without recourse to the information provided” by Longhurst. That is, Longhurst stood to recoup monies owed to him by Ruperti, only if suing counterparties could make good use of information he provided.

    The manner in which Longhurst came to obtain the information in the course of his employment with Ruperti is not questionable. But the use he made of it, after having been sacked by Ruperti, certainly was.

    That did not bother Hall at all. It didn’t matter to Novoship either, which Ogden states ended up buying Longhurst’s claim for unpaid salaries for $300,000. To round things up, Hall hired Longhurst, as a consultant for Focus Intelligence, around the time Fairfax was emailing his proposal. Do keep in mind that Hall had no issue of making use of information obtained by an ex-employee of Ruperti to help Novoship.

    Fast forward a few years. Hall’s Focus Intelligence firm is acquired by Burford Capital, involved as funding source of Novoship litigation against Ruperti in the UK. Hall becomes part of Burford.

    In court documents filed in yet another case against Ruperti in Florida (Harry Sargeant III v Maroil, Ruperti et al), it is claimed that Hall conspired with Dan Sargeant to access Harry Sargeant III’s emails, which were hosted in the Sargeants family business servers. Harry III claims that his information was of a personal nature, confidential, and that as a 25% partner of the family venture was not subject to any control /unauthorised access by his relatives / partners without his consent.

    Hall allegedly exchanged the Harry III information he got from Dan Sargeant, with the stuff he had gotten from Ruperti’s former employee Longhurst, to assist clients.

    In a separate case reported by the Wall Street Journal, Hall is presented as some kind of cyber sleuth, who was engaged by yet another party to assist in litigation against Harry III. Tasked to find assets, Hall chased his target around London and Geneva in an attempt to serve him and seize a plane.

    What is extraordinary is that Hall, and his employer Burford, would allegedly engage in such activities without considering its potential consequences. Burford Capital is a publicly traded company, which means the work of its employees would be of interest to regulators.

    A request for comment was sent to Daniel Hall:

    My name is Alek Boyd, I’m an investigative journalist from Venezuela.

    Wilmer Ruperti has been a topic of research of mine for some years.

    As per documents recently filed in PACER, from which I obtained your email, I take you are related to a current case involving Ruperti.

    I would like your comments on the paragraph below (bold added for emphasis), for an article I am preparing, and should be most grateful if you could reply at your earliest possible convenience.

    "Finally, the very nature of Hall’s scheme makes the SAC’s allegation that he knew it was unlawful to obtain the HS3 Material probable. Hall offered the Ruperti Material, which was subject to a non-disclosure agreement and required to be destroyed as part of a confidential settlement agreement, in exchange for the HS3 Material. (SAC ¶¶ 29-30) Not only did Hall seek to violate the law in obtaining the HS3 Material, his main bargaining chip — the Ruperti Material — was obtained in a separate violation of the law. Then, Hall repeatedly maintained his request for the HS3 Material. DSargeant, was understandably reluctant to give over the HS3 Material, because all involved understood it was obtained unlawfully. Thus, in the first meeting between Hall and DSargeant, Hall gave only a teaser of the Ruperti Material in order to secure DSargeant’s performance of his end of the unlawful agreement. (SAC ¶¶ 35-36)”

    Hall did not reply. Instead, I got the following, from Mark Klein, Burford’s General Counsel:

    Mr. Boyd,

    We are in receipt of your email.

    Burford has a longstanding policy of not commenting on individual litigation matters. Confidentiality in such matters belongs to the client, not to Burford.

    However, we note that you are proposing to make multiple accusations that Burford violated the law.  We deny any such allegation, and we put you on notice of the defamatory nature of those statements, as to which we reserve all rights.

    Mark N. Klein
    General Counsel
    BURFORD CAPITAL

    As I replied to both Hall and Klein, I don’t know in what parallel universe requesting comments for information contained in public fillings can be construed as defamation. Perhaps the legal actions that Burford’s reserves to take might come after suing Hall, Andrew Preston, Dan Sargeant, Harry III, Ogden, Longhurst, Fairfax, court clerks in Florida and in the UK, and PACER. Or maybe, considering parties involved and their methods, my family and I will be threatened, harassed and some thugs will pay another visit.

    Independent judiciary authorities will eventually determine which of the Sargeants / Ruperti are at fault here. But that does not make actions attributed to Hall any more kosher. And most certainly it doesn’t make the reply from Burford’s General Counsel any more acceptable.

    A journalist gets in touch requesting comment. If what comes back is a legal threat, such heavy handedness creates more suspicion, not less. It's called Streisand effect. If Burford Capital wanted me to think that there is nothing untoward in Hall’s actions as quoted above, they just couldn’t have picked a more counterproductive strategy.

    Fairfax, Hall, Burford, Preston... belong to that London tribe of “gentlemen,” convinced of their own infallibility. It is a fine crowd, whose best exponents are regularly portrayed, in “defamatory nature” I presume, by the media.

    This site shall engage in another fine tradition: that of journalists speaking truth to the pin stripe brigade and exposing corruption.

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