US Securities and Exchange Commission Charges Thornburg Mortgage, Inc. for Fraudulent Accounting

Abstract

Thornburg Mortgage Company (TMC) was a rising star among mortgage companies in the United States, second only to Countrywide Mortgage. It virtually came out of nowhere in the 1990s to become a publicly traded company whose stock was traded on the NASDAQ. That’s the “good.” The “bad” is what happens next. As the housing market and related mortgage business boomed, it became too good to be true. As the financial stability of Thornburg Mortgage became increasingly volatile, the executive management team became scared. What transpired next was unthinkable. This chapter explores the impact on company’s accounting practices, financial statements, management representations to the public, the corporate image, and the related outcomes when there is a radical decline in the “tone at the top.” The research further analyzes the impact of greed, fear, and fraud in the post-Sarbanes-Oxley business environment.