SEARCH

Nasdaq offers $62-m compensation for Facebook IPO technical snag

PTI
Share  ·   Comment   ·   print   ·  
Nasdaq will offer a $62-million fund for voluntary accommodations, which is $22 million larger than the June 6 proposal, the exchange said in a statement.
Nasdaq will offer a $62-million fund for voluntary accommodations, which is $22 million larger than the June 6 proposal, the exchange said in a statement.

Nasdaq OMX group will provide funds to the tune of $62 million to compensate clients who were disadvantaged by technical problems that arose during the Facebook IPO on May 18.

Nasdaq will offer a $62-million fund for voluntary accommodations, which is $22 million larger than the June 6 proposal, the exchange said in a statement.

Facebook had begun trading publicly on May 18 following one of the most anticipated stock offerings in history. But the stock’s public debut was marred by technical glitches at the Nasdaq Stock Market that delayed trading.

On the opening day, the orders failed to be executed, or in trader parlance “print”. Nasdaq was unable to deliver trade execution messages until mid-afternoon, leaving traders in the dark about whether their orders had gone through.

The proposed voluntary accommodation programme will be filed with the Securities and Exchange Commission (SEC), Nasdaq said.

“We deeply regret the problems encountered during the initial public offering of Facebook,” NASDAQ OMX Group Chief Executive Officer and President, Mr Robert Greifeld, said.

The independent Financial Industry Regulatory Authority (FINRA) has agreed to evaluate claims submitted by firms under the voluntary accommodations programme. All claims will be paid in cash, simplifying the process and eliminating trading credits from the earlier proposal.

Nasdaq expects to compensate all the accommodation plan within six months.

“We failed to meet our own high standards based on our long history of providing outstanding technology to our members and exchange customers. We have learned from this experience and we will continue to improve our trading platforms,” Mr Greifeld added.

Nasdaq’s offer, however, falls far behind the $100 million in losses that wholesale trading firms which trade on behalf of online retail brokerages like Knight Capital, Citadel, and units of UBS and Citigroup demanded.

(This article was published on July 21, 2012)
XThese are links to The Hindu Business Line suggested by Outbrain, which may or may not be relevant to the other content on this page. You can read Outbrain's privacy and cookie policy here.

Comments:

This article is closed for comments.
Please Email the Editor

Telecom makes a comeback. Higher tariffs, growing number of high-end users and increase in data revenues are ringing in better times »


O
P
E
N

close

Recent Article in Stocks

Broker's Call: MICROSEC RESEARCH

Microsec ResearchWhirlpool of India (Buy)CMP: ₹443Target: ₹580We continue to recommend Whirlpool of In... »

Comments to: web.businessline@thehindu.co.in. Copyright © 2014, The Hindu Business Line.