(f/k/a THORNBURG MORTGAGE) EXECUTIVES RESPOND TO SEC LAWSUIT Santa Fe, New Mexico, March 13, 2012 – Larry Goldstone and Clay Simmons, the former CEO and CFO of TMST, Inc., (formerly known as Thornburg Mortgage), respectively, responded today to the filing of a civil lawsuit against them by the U.S. Securities and Exchange Commission. Goldstone and Simmons believe the action is wholly without merit. They have refused to settle the matter with the SEC, as they do not believe that their actions or the factual record support the SEC’s allegations. Instead, they will vigorously defend themselves in court, certain they will prevail. TMST was the nation’s second largest independent mortgage originator and became a casualty of the 2008 financial crisis when it was forced to file for bankruptcy in May 2009 after its lenders refused to continue to extend credit because of their own financial difficulties. “We are profoundly disappointed by the SEC’s lawsuit, which is based on unfounded claims, emails taken out of context and inaccurate interpretations of management’s actions surrounding the company’s financial filings at the height of the financial crisis in February and March 2008. The SEC’s case singles out and punishes us for not having the clairvoyance to anticipate an unprecedented financial system crisis. It is worth noting that this same crisis was not foreseen by two Secretaries of the Treasury, two Chairmen of the Federal Reserve, the Chairman of the SEC, and the heads of major public and private financial institutions across the globe. Any fair and objective assessment of our actions during that time shows that the SEC’s allegations against us have no merit,” said Goldstone and Simmons. “In its zealousness to find people to blame for the financial crisis, the SEC has brought a case based on hindsight that is not supported by the facts, unwinnable in court, and profoundly unfair.” The key facts include the following:

The Company’s 2007 10-K filing fully disclosed all relevant information in clear terms, providing robust and extraordinary disclosure about the margin calls that TMST had received, and more importantly, about the risks of future margin calls and the possible need to sell assets. The “Recent Developments” section of the 10-K was highly unusual because of its explicit disclosures about the threats to the company’s business from unprecedented market events. The market clearly understood the gravity of TMST’s disclosure; there was a precipitous drop in stock price that day.

KPMG, the company’s auditor, conducted a review of the circumstances surrounding TMST’s financial statements at the time and stated that it had no concerns about management’s integrity, that it had found no material weaknesses in the company’s internal controls, and that the restatement of TMST’s financials resulted from “an error in judgment” about the impact of rapidly changing and illiquid credit markets on the company’s financial condition and not from fraud on the part of management.

Goldstone and Simmons communicated candidly and forthrightly with investors while they waged an 18-month battle to save the company and hundreds of jobs in New Mexico during a period of unprecedented market turmoil. In fact, under their leadership, TMST explicitly warned investors about the volatility of the mortgage securities market and the threats to its business from highly uncertain market conditions at that time.

Goldstone and Simmons share a long-standing reputation as industry leaders who conducted themselves at all times with integrity, transparency, and good corporate stewardship. Under their leadership, TMST became an industry leader renowned for its high quality lending, which created a portfolio of loans and mortgage securities of outstanding credit quality whose delinquency rates remain well below the industry average.

Goldstone and Simmons were so well respected by the industry and the investment community that they raised nearly $2 billion through a series of stock and bond offerings even as other larger mortgage companies and global financial institutions collapsed around them.

The SEC’s charges focus solely on one filing and a two-week period in late February and early March 2008, and rests on hindsight judgment about what Goldstone and Simmons supposedly should have disclosed in the midst of an historic market collapse. Within days after the events at issue, the Vice Chair of the Federal Reserve testified that the problems in the mortgage and housing markets were “highly unusual” and that in general these market circumstances “should not threaten their viability.” And the Chairman of the SEC, in discussing investment banks, said “We have a good deal of comfort about the capital cushions at these firms at the moment.” Five days later, Bear Stearns collapsed.

Neither Goldstone nor Simmons profited from the financial statements that the SEC claims were false. Indeed, Goldstone has never sold a single share of TMST stock, while Simmons sustained losses on the small number of shares he sold. Both men lost substantial sums as a result of their efforts to save the company.

Messrs. Goldstone and Simmons are represented by Wilmer Cutler Pickering Hale and Dorr LLP. ###

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