NEW YORK (Reuters) – The wealthy Texas brothers Samuel and Charles Wyly on Thursday lost their bid to dismiss a U.S. Securities and Exchange Commission lawsuit accusing them of orchestrating a $550 million securities fraud and committing insider trading.

U.S. District Judge Shira Scheindlin in Manhattan denied motions to dismiss the complaint in its entirety. She said the SEC adequately alleged the Wylys’ liability for fraud, and stated a claim for insider trading against the brothers.

Following a six-year probe, the SEC last July accused the Dallas-based brothers of creating a sham web of offshore trusts in the Isle of Man and Cayman Islands to conceal 13 years of stock sales in four companies they founded or where they served as directors.

The regulator said the Wylys hid the sales to eliminate the risk that disclosure would send a bearish signal to the market and cause share prices to fall while they were selling.

Scheindlin agreed the SEC adequately pled the concealment of sales in Sterling Software, Michaels Stores Inc, Sterling Commerce Inc and Scottish Annuity & Life Holdings Ltd.

The judge also said the SEC may pursue a claim that the Wylys reaped $31.7 million from insider trading on Sterling Software after deciding in late 1999 to sell the company.

“A reasonable investor would almost certainly want to know information related to the Wylys’ planned sale,” she wrote.

William Brewer, a lawyer for the Wylys, in a statement said his clients were disappointed with the decision. “The Wylys will continue to vigorously defend themselves, and they remain confident they will be fully vindicated,” he said.

Scheindlin also refused to dismiss SEC charges against Louis Schaufele, a stockbroker, and Michael French, a lawyer for the Wylys. Schaufele’s lawyer Martin Auerbach declined to comment. A lawyer for French did not immediately return a call seeking comment.

The lawsuit is among the higher-profile cases that the SEC has pursued following criticism that its enforcement had been lax and it failed to uncover Bernard Madoff’s Ponzi scheme.

According to the SEC, the Wylys used their improper gains to acquire nearly $100 million of real estate, including two ranches in Aspen, Colorado, and a 100-acre horse farm outside Dallas; to buy tens of millions of dollars in art, collectibles and jewelry; and to make large donations to charitable causes.

The brothers built Michaels into a big arts and crafts retailer before selling it for about $6 billion in 2006 to private equity firms Blackstone Group LP and Bain Capital Partners LLC. Sterling Commerce was sold for about $4 billion in 2000 to what is now AT&T Inc. Scottish Annuity is a reinsurer now called Scottish Re Group Ltd.

Forbes magazine last September estimated that Samuel Wyly was worth $1 billion.

NEW YORK (Reuters) – Stocks slid more than 1 percent on Thursday and the S&P 500 fell through a key technical level amid global economic worries, suggesting more losses may be on the way.

Nearly seven stocks fell for every one that rose on both the New York Stock Exchange and the Nasdaq, in an indicator of the depth of the negative sentiment driving the sell-off.

A ratings agency’s downgrade of Spain, an unexpected swing to a trade deficit in China and jobless and other data the United States heightened global growth worries.

“The market just needed a catalyst. It was so extended. And to me, I see the China trade deficit as a catalyst, I see the Spain downgrade as a catalyst,” said Paul Mendelsohn, chief investment strategist at Windham Financial Services in Charlotte, Vermont.

Analysts have been calling for a correction in the market after its big run up since early September. The S&P 500 is up roughly 25 percent since then.

The benchmark S&P 500 index fell below its 50-day moving average, an indication of medium-term momentum for the market, for the first time since November.

Mendelsohn said he’s eyeing 1,294.26 on the S&P 500 as critical support.

“Once we take that out, I see 1,250 in my sights pretty easily, so I think this is the beginning of something severe,” he said.

Energy shares represented the biggest drag on the S&P 500, as oil prices pulled back from recent highs. The S&P energy index (.GSPE) fell 2.8 percent, a reversal from its recent rally on skyrocketing oil prices.

The Dow Jones industrial average (.DJI) was down 175.16 points, or 1.43 percent, at 12,037.93. The Standard & Poor’s 500 Index (.SPX) was down 19.31 points, or 1.46 percent, at 1,300.71. The Nasdaq Composite Index (.IXIC) was down 43.06 points, or 1.57 percent, at 2,708.66.

An index of semiconductors (.SOX), among the market’s weaker areas this week, lost 1.6 percent.

Apple Inc (AAPL.O), down 1.8 percent at $346.18, was the biggest drag on the Nasdaq 100 (.NDX). Apple’s stock also has climbed steadily in recent weeks, with a gain of 7.3 percent for the year. The company’s new iPad tablet computer will go on sale early on Friday.

Volume totaled 4.4 billion near midday and looked on track to close at an above-average level.

Brent oil futures prices declined, even as Libyan leader Muammar Gaddafi carried counterattacks deeper into the insurgent heartland. The turmoil has driven oil prices up sharply in recent weeks.

“Two areas hit this week are energy and semis, and these are two of the best areas so far this year,” said Eric Marshall, director of Research, Hodges Capital Management, Dallas, Texas. “That’s the normal consolidation you would expect after the big run we’ve had.”

The energy index is up 9 percent since the start of the year, while the semi index is up 3.7 percent. The S&P 500 is up 3.4 percent since the end of December.

Adding to the negative tone, U.S. government data showed initial claims for state unemployment benefits increased 26,000 to a seasonally adjusted 397,000 and the trade deficit widened much more than expected in January to $46.3 billion.

Moody’s one-notch downgrade of Spain, based on the costs of restructuring its banks, came with a warning that further cuts were possible. The agency downgraded Greece’s debt earlier this week.

China swung to an unexpected trade deficit in February of $7.3 billion, its largest in seven years, but economists said the drop was likely temporary.

The CBOE Volatility Index or VIX (.VIX), Wall Street’s favorite gauge of investor fear, was up 3.6 percent at 20.95 in late-morning trading.

(Reporting by Caroline Valetkevitch; Additional reporting by Charles Mikolajczak and Doris Frankel; Editing by Jan Paschal)

NEW YORK (Reuters) – The dollar weakened broadly on Thursday on expectations of low bond yields continuing in 2011, while U.S. and European stocks gave back part of the recent gains that had taken global equities near September 2008 highs.

The Swiss franc soared to record highs against the dollar and the euro as concerns about the European debt crisis reinforced its safe-haven appeal among currency investors.

U.S. stocks dipped in spite of a solid batch of economic data as investors avoided taking on more risk before the new year. Still, the S&P 500 was headed for its best December in nearly two decades and a MSCI index of global stocks remained close to September 2008 highs.

Japan’s Nikkei stock futures traded in Chicago were little changed at 10,230.

“The common sense of the street is that we get pullback after this Santa Claus rally and a very strong run up in the S&P since August,” said Peter Kenny, managing director at Knight Equity Markets in Jersey City, New Jersey.

Kenny added, however, that he expects the pullback to come in February instead. “I don’t think it will be in early January because everybody is expecting it.”

Giuseppe-Guido Amato, strategist at Lang & Schwarz in Germany, said that even as companies remain in good shape, “you can’t just buy and hold” after the recent rally.

“There are still the systemic risks of the euro zone sovereign debt crisis,” he said.

Highlighting such concerns, Italy, in its sale of 8.1 billion euros ($10.7 billion) of medium and long-term debt, missed the top end of its targeted range for 8.5 billion euros and had to pay higher yields to investors.

European sovereign debt concerns pushed the euro down to 1.2398 francs on trading platform EBS after a Swiss bank targeted an option barrier at 1.2400. It last traded at 1.2429, down 0.6 percent.

The dollar was down 0.35 percent against a basket of major currencies, according to the U.S. Dollar Index. The euro gained 0.48 percent against the greenback to $1.3287.

The dollar has been weakening since a surprisingly strong Treasury auction on Wednesday put pressure on government bond yields. Treasuries yields were modestly higher on Thursday due to stronger-than-expected economic data, but investors expect them to remain under pressure in 2011 as the U.S. Federal Reserve maintains its ultra-loose monetary policy.

Against the Swiss franc the dollar fell to 0.9356 francs on EBS as the euro/Swiss barrier gave way. It was last at 0.9356, down 1.0 percent on the day.

“We continue to be Swiss franc bulls, expecting that its status as a European alternative to the euro, a strong sovereign position and relatively solid fundamentals will continue to make it an attractive home for investors,” said Camilla Sutton, chief currency strategist at Scotia Capital in Toronto.

Thinning liquidity ahead of the New Year’s holiday likely exaggerated price swings in currency markets, traders said.

STOCKS TREADING WATER

U.S. stocks traded flat to lower as the thin liquidity discouraged investors from making big bets.

The Dow Jones industrial average finished down 15.67 points, or 0.14 percent, at 11,569.71, while the Standard & Poor’s 500 Index lost 1.90 points, or 0.15 percent, to 1,257.88. The Nasdaq Composite Index declined 3.95 points, or 0.15 percent, to 2,662.98.

That weak performance came despite positive economic data, including a government report that showed new U.S. claims for unemployment benefits dropped 34,000 to a seasonally adjusted 388,000, the lowest reading since early July 2008.

Another report showed activity in the U.S. Midwest jumped unexpectedly in December, with help from a gain in employment and new orders. And pending sales of previously owned U.S. homes rose faster than expected in November.

In Europe, the FTSEurofirst 300 index closed down 1.26 percent, its largest one-day retreat this month. Still, the index is on track to post its biggest monthly gain since March. Thursday was the last trading day of the year in several European countries, including Germany, Spain and Italy.

The benchmark MSCI All-Country World Index finished virtually flat, near Wednesday’s close of 330.90, which was the highest since September 2008.

A weaker dollar pushed silver to new 30-year highs while palladium neared its highest in almost ten years, but gold prices fell 0.47 percent to $1,403.90 an ounce after the positive U.S. economic data.

The data also reduced the safe-haven appeal of U.S. government debt. The benchmark 10-year U.S. Treasury note was down 3/32 in price, with the yield at 3.366 percent.

Treasuries prices could be buoyed on Friday, however, by traders positioning for new Federal Reserve purchases of bonds next week.

(Additional reporting by Chuck Mikolajczak, Wanfeng Zhou, and Karen Brettell in New York, Editing by Chizu Nomiyama)

LONDON (AFP) – Britain’s leading share index fell back sharply on Monday with only two blue chip firms posting modest gains as Ireland’s 85-billion-euro bailout failed to dispel investor fears over the eurozone debt crisis.

The FTSE 100 dropped 2.08 percent — or 117.75 points — to close at 5,550.95 points.

The index lost ground as traders fear Spain and Portugal will require an Irish-style rescue from the European Union and International Monetary Fund.

Barclays was the star performer as the lender added 3.15 pence –or 1.21 percent — to close at 262.95.

Peer HSBC barely managed to scrape a profit as its share price inched up 0.30 pence — or 0.05 percent — to close at 651.4 pence.

“Only a few banks have managed to scrape any gains out of today?s trading session,” said Chris Purdy — an analyst with Spreadex.

“Investors are no longer rejoicing in government intervention as they did earlier this autumn. Investors are no longer rejoicing in government intervention as they did earlier this autumn,” he added.

The biggest fallers were in commodity stocks with Petrofac and Cairn Energy leading the fallers.

Petrofac was the biggest casualty with the oil service provider shedding 5.75 percent — or 85 pence — to close at 1392.

Cairn was also under heavy selling pressure with the oil firm losing 4.41 percent — or 17.40 pence — to end the session at 377.6.

Sterling enjoyed a mixed session as it slipped against the dollar but rose against the euro.

At 17:07 GMT, the pound was trading at 1.5556, down from 1.5592 dollars at the same time on Friday.

The British currency fared better against the single European currency, trading at 1.1883 euros, up from 1.1777 over the same period on Friday.

LONDON (AFP) – London shares slipped into the red Tuesday as investors fretted over the eurozone debt crisis and geopolitical tensions between North and South Korea.

The FTSE 100 index closed down 1.75 percent at 5581.28 points.

Lloyds Banking Group (LBG) was the most traded stock, seeing 249 million shares switch owners, followed by Royal Bank of Scotland (RBS), which saw 189 million units change hands.

Fresnillo was the top blue-chip performer, adding 21 pence — or 1.50 percent — to end at 1425, followed by Rolls Royce, which rose 8 pence — or 1.35 percent — to end at 598.5.

Man Group led the fallers, shedding 14 pence — or 4.85 percent — to end at 274.5, followed by Vedanta, which was down 101 pence — or 4.55 percent — to end at 2120..

Elsewhere, the pound lost to the dollar but rose against the euro.

At 17:04 GMT, sterling was trading at 1.5815 dollars, down from 1.5957 at the same time on Monday, while the currency stood at 1.1815 euros, up from 1.1711 over the same period.

NEW YORK (Reuters) – General Motors Co made a triumphant return to Wall Street less than a year and a half after the government rescued the automaker and forced a massive overhaul but its shares lost momentum after an early bounce.

As some of the automaker’s newest models lined up outside of the New York Stock Exchange, GM shares began trading on the floor of the Big Board to the sound of a revving Camaro engine, taking the place of the traditional opening bell.

Close to 220 million shares had traded by the market close, more than triple the amount of trading in Citigroup Inc, the next most actively traded stock. GM shares also traded on the Toronto Stock Exchange.

The start of trading in GM shares is one of the final steps in an initial public offering process negotiated by the Obama administration that raised $20.1 billion in common and preferred shares, making it the biggest IPO in U.S. history.

The IPO caps the first stage of a turnaround that has taken the 102-year-old automaker from near-death via a 2009 bailout, to unlikely Wall Street flotation favorite in 2010.

A successful stock debut may help the Obama administration argue that the controversial $50 billion taxpayer bailout of GM was worthwhile. The White House said U.S. taxpayers were on track to recoup the full investment made by the administration and that it hoped to make substantial progress shedding the government’s stake entirely by mid-to-late 2012.

“American taxpayers are now positioned to recover more than my administration invested in GM,” President Barack Obama told reporters at the White House on Thursday afternoon.

The government has estimated that an industry failure led by a GM collapse would have cost 1 million jobs, including suppliers, and would have reduced U.S. GDP by 1 percent.

The newly minted shares, which zoomed 9 percent higher shortly after the market opened, gave back some of those gains as the day went on even as the broader market rallied, with some speculating that the U.S. government’s stake in the automaker — expected to drop to about 33 percent — was still making some investors nervous.

Others pointed out that room for gains was limited after the price range and size of the IPO were both increased in the past week.

“Going forward, I do think that when they raised the IPO price … probably a lot of gains that I would have anticipated were already priced in, that the government got the profit,” said Bernie McGinn, chief investment officer at McGinn Investment Management in Alexandria, Virginia, who owns Ford stock. “I wouldn’t expect a lot on the upside, I wouldn’t expect a lot on the downside for GM.”

The IPO valued GM at about $63 billion. Including a yet-to-be exercised option that allows underwriters to sell more shares depending on demand, GM looks set to raise $23.1 billion, eclipsing the record $22.1 billion raised by Agricultural Bank of China in July.

“It was always a process where we would build interest for the transaction and momentum for the transaction and if we were able to get the right price and demand, then we’d be able to supersize it, which is what ended up happening,” said Bill Contente, co-head of Equity Capital Markets for the Americas and one of JPMorgan’s lead bankers on the GM IPO.

The offering’s success was a feather in the cap of the lead underwriters on the deal, Morgan Stanley, JPMorgan, Bank of America Merrill Lynch and Citigroup.

The IPO is set to generate up to $273.6 million in underwriting fees including the overallotment option for common and preferred stock in the offering, according to a regulatory filing by the automaker.

JOB NOT DONE

The team of GM executives led by Chief Executive Dan Akerson that pitched the IPO to investors said they recognized their job in transforming GM was not done.

“We have to celebrate on the run here,” GM North America President Mark Reuss told Reuters. “It’s a big day to become a public company again but we have got to just hit the ball out of the park here every day on product.”

Chief Financial Officer Chris Liddell said the automaker’s goal was to pay down all of its remaining debt and fully fund its pension plan, removing one of the concerns investors had cited heading into the IPO.

“We are in a good position to do that over the next few years,” Liddell told Reuters Insider.

At $33 a share, the partial sale represents a loss of about $9 billion on taxpayers’ original investment, assuming the extra shares go at the same price.

To break even on the bailout, the Treasury would have to average near $52 per share on its remaining stock sales, more than 50 percent above GM stock’s closing price on Thursday. GM shares gained 3.6 percent to close at $34.19, trimming gains from an earlier high at $35.99.

China’s SAIC Motor Corp confirmed on Thursday that it bought a 1 percent stake in GM. The state-run Chinese automaker said it expected its cooperation with GM would broaden to include more technology sharing and “exploration of overseas markets.”

HOPE

The reversal in GM sentiment over the last year pointed to renewed confidence in an industry that faced collapse before unprecedented government intervention. It also offers hope for others, including smaller automaker Chrysler, looking to tap credit and equity markets in coming months, analysts said.

Shares of GM rival Ford Motor Co, which had risen by 17 percent so far in November — mostly on anticipation of the GM IPO — closed 3.4 percent lower on Thursday.

The GM IPO was the first major test for GM’s new management team led by Akerson, 62, a former head of buyouts at The Carlyle Group.

“The new leadership team is doing very good work. Market share is up, prices per unit are up,” said Xavier Mosquet, a senior partner at The Boston Consulting Group who advised the Treasury on its intervention into the U.S. auto industry.

GM is on track for its first full-year profit since 2004.

It has touted its market-leading position in fast-growth emerging markets led by China, and success with redesigned cars like the Buick LaCrosse, as well as the ability to innovate through the crisis embodied by Chevy’s Volt plug-in hybrid.

GM’s Volt, a key link in the automaker’s thrust to reinvent itself, was named 2011 Green Car of the Year by Green Car Journal on Thursday.

Analysts still see challenges for GM, including the overhang of the U.S. government’s post-IPO ownership stake.

Other investor concerns include continued losses in GM’s European arm — $1.3 billion over the past three quarters — and contract talks next year with United Auto Workers.

Post-IPO, a union health care trust will keep 13 percent of GM shares with a board seat representing its interests.

(Additional reporting by David Bailey in DETROIT, Angela Moon in NEW YORK, Donny Kwok in HONG KONG, Aiko Hayashi in TOKYO, Dominic Lau in LONDON, Josie Cox in FRANKFURT; Writing by Kevin Krolicki; Editing by Anshuman Daga, Andrew Callus, Matthew Lewis, Phil Berlowitz)

LONDON (AFP) – Shares in London ended in the red on Wednesday as jobless claims unexpectedly spiked while investors remained worried over the health of the global economy.

The FTSE 100 index of leading shares lost 0.21 percent to 5,555.56 points.

Lloyds Banking Group (LBG) was the most traded stock, seeing 143 million shares switch owners, followed by Vodafone, which saw 71.8 million units change hands.

Retailer Next led the board, rising 136 pence — or 6.67 percent — to end at 2176, followed by M&S, climbing 12.60 pence — or 3.43 percent — to end at 379.6.

African Barrick was the biggest casualty, shedding 21 pence — or 3.39 percent — to end at 598, followed by oil giant BP losing 11.10 pence — or 2.67 percent — at 404.10.

Meanwhile, the pound strengthened both against the dollar and the euro.

At 17:12 BST, sterling was trading at 1.55636 dollars, up from 1.5539 dollars at the same time Tuesday, while the currency stood at 1.2019 euros, ascending from 1.1960 over the same period.