Nasdaq to Shell Out $40 Million for IPO Snafu
Posted on Jun 6, 2012
Nasdaq announced its intention to make up for its role in the botched Facebook IPO by giving $40 million to investors who were disadvantaged by its technical failures during the social networking site’s public debut.
The Securities and Exchange Commission is investigating Nasdaq regarding the breakdown in its trading service as Facebook shares went on sale.
The result of those considerations is a $40 million voluntary accommodations fund. While the proposal is still subject to SEC review, Nasdaq plans to pay $13.7 million in cash to member firms, with the balance of the fund “credited to members to reduce trading costs.”
To qualify for the program, members must have been “directly disadvantaged” by the Nasdaq’s technical problems prior the the 11:30 a.m. start of trading in Facebook shares, and had “uncertainty regarding their IPO cross position.”
—Posted by Alexander Reed Kelly
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