Litigation Capital Management dismisses executive vice-chair for alleged misconduct over expenses
Employment of leading figure within funding community terminated over 'significant violation of internal company policies'
Litigation funder Litigation Capital Management (LCM) has dismissed its executive vice-chairman, Nick Rowles-Davies, ‘on the grounds of gross misconduct’ in relation to ‘certain expenses claims’.
The allegations were revealed in a statement to the London Stock Exchange today by chief financial officer Mary Gangemi which said he had been removed from his position on the board of directors with immediate effect.
The statement said the termination of Rowles-Davies’ employment ‘follows the identification of certain expenses claims which have been made in contravention of LCM's Global Expense Guidelines and Policy’.
It adds: ‘While the breaches are a significant violation of internal company policies, their quantum is not material to LCM's financial condition and performance.’
The news will shock the litigation funding community as Rowles-Davies is a widely respected figure. The non-practising solicitor joined LCM in December 2018 from Chancery Capital, his previous investment vehicle which he launched in May 2017.
He had previously served as managing director of Burford Capital from May 2014 to August 2016 and co-founded Vannin Capital, which is now part of the Fortress Investment Group.
He is the current chairman of the Commercial Litigation Association, and, since October 2021, a board director of CourtCorrect, an AI-based online dispute resolution start-up.
The funder announced gross profits of A$26.6m, up 23% from the previous year, in its 2021 annual report, with assets under management having grown 34% to A$336m.
LCM also recorded a 10% increase in applications for funding, thanks, in part, to tailored financing arrangements agreed in 2020 with firms including DLA Piper and Norton Rose Fulbright, in which Rowles-Davies played a significant part.
One of the first deals LCM supported in 2018, following the opening of the London office Rowles-Davies founded, concluded last month, a Middle-East construction arbitration which generated £9.8m in revenue, on an investment of £2.8m, a return on capital of 255%.
The firm announced the $200m first close of its second global alternative returns fund in October 2021, building on the success of the first, while chief executive officer Patrick Moloney, who has now relocated to London following a planned move, exercised share options that same month, as did one other director.