Nasdaq paying Facebook
March 25, 2013
A plan to compensate Facebook investors with damages to the tune of $62 million (47 million euros) was finally approved by the United States Securities and Exchange Commission (SEC), US financial market regulators announced.
The payment would be made by Nasdaq OMX Group Inc - the owner of New York-based Nasdaq technology stock exchange – and would have to be made in cash to market makers who had lost money from the initial public offering (IPO) of Facebook shares.
On May 18, 2012, first trading in Facebook shares was delayed by 30 minutes due to technical glitches, which led to orders not being included in the opening cross and to long waits for confirmations. This reportedly cost investors and traders big losses as the stock price dropped after an initial gain.
Brokerages such as Knight Capital Group, UBS and Citigroup said they had collectively lost around $500 million during the botched IPO.
Nasdaq originally drafted a $40 million compensation plan, but later raised it to $62 million amid criticism that the amount was too low.
SEC made its decision after investigating complaints that Nasdaq had accepted only limited categories of claims and would force claimants to waive additional claims against the exchange operator.
uhe/kms (Reuters, dpa)