SEC Charges Thornburg Mortgage Execs

The Securities and Exchange Commission this week has charged the senior-most executives at Thornburg Mortgage Inc., which is called “formerly one of the nation’s largest mortgage companies with hiding the company’s deteriorating financial condition at the onset of the financial crisis.” The SEC charged that their plan backfired and the company lost 90 percent of its value in just two weeks.

The allegations are that Thornburg chief executive officer Larry Goldstone, chief financial officer Clarence Simmons, and chief accounting officer Jane Starrett “schemed to fraudulently overstate the company’s income by more than $400 million and falsely record a profit rather than an actual loss for the fourth quarter in its 2007 annual report. Behind the scenes, Thornburg was facing a severe liquidity crisis and was unable to make on-time payments for substantial margin calls it received from its lenders in the weeks leading up to the filing of its annual report on Feb. 28, 2008.”

There is not really any way to trade this any longer as the stock screens out on the pink sheets and is under one-penny.

FULL SEC COMPLAINT