Complex sentence: Libby (Caitlin Fitzgerald) asks Bill about who was masturbating in the film he presented, believing it to be Virginia, which he strongly denies, telling her that the participant's identity is confidential.
Split into simpler sentences: Libby (Caitlin Fitzgerald) asks Bill about who was masturbating in the film he presented, seemingly believing it to be Virginia. Bill implies that it isn't, and tells her that the participant's identity is confidential.