U.S. stocks slammed Thursday
NEW YORK, June 21 (UPI) -- U.S. stock markets tumbled Thursday despite a slight drop in first-time unemployment benefit claims.
The Department of Labor said initial claims for unemployment benefits dropped by 2,000 in the week ending Saturday to 387,000.
Indicating recent fluctuations have been small, the four-week rolling average for first-time claims rose by 3,500 to 386,250.
Investors are failing to respond to the U.S. Federal Reserve's decision to extend its "operation twist," program to the end of the year. The maneuver, using proceeds from maturing short-term securities to buy long-term securities, gave stocks only a slight boost Wednesday. By Thursday morning any move toward higher ground had faded.
The National Association of Realtors reported sales of existing homes dipped 1.5 percent in May compared with April.
By close of trading on Wall Street, the Dow Jones industrial average dropped 250.82 points, or 1.96 percent, to 12,573.57. The Nasdaq composite index gave up 71.36 points, 2.44 percent, to 2,859.09.
The Standard and Poor's 500 lost 30.18, or 2.23 percent, to 1,325.51.
On the New York Stock Exchange, 575 stocks advanced and 2,495 declined on a volume of 3.7 billion shares traded.
The benchmark 10-year treasury note rose 14/32 to yield 1.617 percent.
The euro fell to $1.2546 from Wednesday's $1.2706. Against the yen, the dollar rose to 80.24 yen from Wednesday's 79.55 yen.
In Tokyo, the Nikkei 225 index added 0.82 percent, 71.76 points, to 8,824.07.
In London, the FTSE 100 index shed 0.99 percent, 55.93, to 5,566.36.
Fair Finance owners convicted
INDIANAPOLIS, June 21 (UPI) -- A jury convicted three businessmen in Indiana on fraud charges Thursday in a case involving 5,000 investors and the theft of $200 million.
The jury took eight hours to return with multiple convictions against former attorney Tim Durham and partners James Cochran and Rick Snow, who bought investment vehicle Fair Finance in 2002 and quickly turned the business into a cash cow, using client funds to loan themselves money and support their lavish lifestyles, the Indianapolis Star reported Thursday.
The three men were indicted in March 2011 on 12 charges of wire fraud, securities fraud and conspiracy to commit wire and securities fraud.
Durham lived an especially lavish lifestyle, building up a collection of 20 classic cars, including a Rolls-Royce, a Ferrari, a Lamborghini and an Aston Martin, the newspaper said.
He also owned a $6 million yacht and a $5.5 million mansion. His art collection, the Star reported, included paintings by Pablo Picasso.
Along the way, his personal investments included local business and National Lampoon, which produced films such as "Animal House," and a series of vacation-oriented comedies.
The convictions included possible sentences of up to five years in prison for conspiracy and up to 20 years on each of the fraud counts.
A sentencing hearing is expected to be scheduled within the next three months.
Tim Durham's attorney declined to comment on the verdict. Jeff Baldwin, Snow's attorney, said he was disappointed in the outcome, the Star reported.
Feds focus on military mortgage abuse
WASHINGTON, June 21 (UPI) -- U.S. finance regulators said Thursday they are mounting a concerted effort to stop mortgage abuses involving military personnel.
"Those who serve our country deserve to be given the best service by their mortgage servicer," said Richard Cordray, director of the Consumer Financial Protection Bureau.
The Washington Post reported the effort to crack down on various illegal mortgage practices was announced jointly by the CFPB, the Federal Reserve, the Federal Deposit Insurance Corp., the National Credit Union Administration and the Office of the Comptroller of the Currency.
The illegal practices involve failing to tell military personnel of programs designed to provide financial advice or assistance and, conversely, convincing them to waive their rights to certain protections.
About a third of military personnel are reassigned, forcing them to move each year, making them particularly vulnerable to mortgage malfeasance, the Post said.
In 2011, JPMorgan Chase bank settled a class-action lawsuit on mortgage violations involving military personnel for $27 million.
Alcoa bribery case gets green light
PITTSBURGH, June 21 (UPI) -- The U.S. Justice Department Thursday permitted a federal judge to lift an injunction that had stood in the way of a civil lawsuit filed against Alcoa Inc.
The government had initially asked U.S. District Judge Donetta Ambrose to block access to documents and witnesses involved in Aluminum Bahrain's lawsuit in which it charged that Alcoa used bribes to allow it to overcharge for alumina, a material Aluminum Bahrain uses to produce aluminum, the Pittsburgh Tribune-Review reported Thursday.
The Justice Department had requested the injunction, in effect blocking the pre-trial, discovery phase of the lawsuit, so it could examine the evidence for a criminal case it is considering.
In the civil case, Aluminum Bahrain is seeking $1 billion in damages. Alcoa, the company says, took in more than $400 million in illegal profits by overcharging, the newspaper said.
Justice Department deputy chief Adam Safwat of the criminal fraud division said the investigation is continuing, but the department no longer objected to the civil case proceeding.
