This is a securities fraud class action lawsuit against Thornburg Mortgage Inc. and certain of its officers and directors.
Thornburg was in the business of originating, funding then selling home loans. Until the summer of 2007, Thornburg issued numerous, positive financial statements, annual and quarterly financial reports filed with the SEC, press releases, and other public statements that described Thornburg's financial performance. These public statements were materially false and misleading because they misrepresented and failed to disclose the following adverse facts, among others: (a) that Thornburg was facing increasing margin calls; (b) that its available leverage had significantly diminished; (c) that its financial situation had deteriorated to the point where it must sell certain assets; and, (d) that as a result of the foregoing Thornburg reported overstated financial results. As a result of defendants' false statements, Thornburg's stock traded at artificially inflated price, reaching a high of $30.64 per share on June 17, 2005.
The truth was exposed on August 20,2007, when Thornburg published a press release over the Business Wire detailing that it was forced to sell $20.5 billion of its top-rated mortgage backed securities to boost its liquidity. This announcement was made in the wake of the August 14 announcement that Thornburg had to stop funding loans due to the credit crunch. Thornburg had been unable to repay nearly $8.4 billion of commercial paper outstanding as of June 30, 2007 because buyers of the paper demanded terms and covenants that Thornburg was either unwilling or unable to satisfy. As a result of these disclosures, THornburg's price per share fell $1.73 by midday trading, a 9% decline over its previous close on extremely heavy volume.
Name (Stock Symbol)
Thornburg Mortgage, Inc. (THMRQ.PK)
Thornburg Mortgage, Inc., now in bankruptcy, operates as a residential mortgage lending company. It originates, acquires, and retains investments in adjustable and variable rate mortgage (ARM) assets.
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