Nasdaq offers $40mln to compensate investors affected by Facebook IPO glitches
Washington, June 7 : The Nasdaq stock exchange has said that it will offer cash and rebates totalling 40 million dollars to compensate clients affected by the technical glitch during Facebook's Initial Public Offering.
Nasdaq said that it had agreed to pay 13.7 million dollars to its affected member firms and the balance would be credited to members to reduce trading costs, with all benefits expected to be awarded within six months.
"Our expectation is that every firm will receive some measure of cash and that every firm will receive their full accommodation by year end if current trading patterns persist," The Telegraph quoted Eric Noll, executive vice president for transaction services at Nasdaq OMX, as saying.
Robert Greifeld, Nasdaq chief executive, told the Wall Street Journal that Nasdaq `owed the industry an apology' for the technical problems that marred Facebook''s IPO on May 18.
According to the paper, the compensation, however, falls short of the losses claimed by top market makers for the company''s IPO.
Knight Capital, one of the main market makers in Facebook''s IPO, branded Nasdaq''s offer of compensation `simply unacceptable'.
UBS, Citigroup, Knight Capital and Citadel Securities together lost over 115 million dollars due to technical problems that prevented them from knowing for about two hours if their orders had gone through after Facebook began trading.
Smaller market makers that might have suffered losses will also receive a part of the 40 million dollars, the report said. (ANI)