The Securities and Exchange Commission is giving up in its case against two former executives Thornburg Mortgage who stood accused of hiding the financial condition of Thornburg as the once-dominant mortgage lender stumbled towards collapse during the financial crisis.
According to report from Reuters, the SEC on Friday dropped its civil case against former Thornburg CEO Larry Goldstone and Clarence Simmons, Thornburg’s former chief financial officer.
Here’s Reuters with the details:
In papers filed in federal court in Albuquerque, New Mexico, the SEC said it would no longer pursue its civil case against former Thornburg CEO Larry Goldstone and former CFO Clarence Simmons, which had been set for a re-trial on Feb. 21.
The decision marked a setback in the agency's push to hold executives accountable in connection with the U.S. housing meltdown and financial crisis, and came after a jury in July returned a mixed verdict in the initial trial in the case.
The jury found Goldstone and Simmons not liable on five of 10 counts while deadlocking on the other claims. The SEC later in September dropped three remaining claims and said it would no longer pursue what the defense called its central allegation.
At its peak, Thornburg was the second largest mortgage lender in the country behind Countrywide, but the company became embroiled in controversy when it filed for bankruptcy in May 2009.
The SEC then pursued a civil case against Goldstone and Simmons in 2012, accusing them of defrauding investors by claiming that Thornburg’s income was $400 million higher than it actually was.
The SEC also accused Goldstone and Simmons of falsely stating that Thornburg turned a profit in the fourth quarter of 2007.
Now, the SEC case against the Thornburg execs is over.
Again from Reuters:
Randall Lee, a lawyer for Goldstone and Simmons, said his clients were "thrilled to have finally been exonerated."
"We always believed that the evidence in this case demonstrated that our clients had acted in good faith in attempting to navigate through the early stages of the financial crisis," Lee said in a statement.
