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FORMER TMST, INC. (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 SECs allegations. Instead, they will

vigorously defend themselves in court, certain they will prevail. TMST was the

nations 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 SECs lawsuit, which is based on

unfounded claims, emails taken out of context and inaccurate interpretations

of managements actions surrounding the companys financial filings at the

height of the financial crisis in February and March 2008. The SECs 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 SECs 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:

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The Companys 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 companys business from unprecedented market

events. The market clearly understood the gravity of TMSTs

disclosure; there was a precipitous drop in stock price that day.

KPMG, the companys auditor, conducted a review of the

circumstances surrounding TMSTs financial statements at the time

and stated that it had no concerns about managements integrity,

that it had found no material weaknesses in the companys internal

controls, and that the restatement of TMSTs financials resulted from

an error in judgment about the impact of rapidly changing and

illiquid credit markets on the companys 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.

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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 SECs 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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