05 October 2015

Nasdaq OMX defends $62m Facebook compensation package

20 September 2012  |  5000 views  |  0 Nasdaq

Nasdaq OMX ha defended its proposed $62 million compensation offer to firms affected by the botched Facebook IPO, describing the package, in a letter to the SEC, as "fair and equitable".

The 18 May IPO was beset by technical glitches - including a malfunction in the system's design for processing order cancellations - that left market makers unsure of whether trades went through.

Nasdaq OMX initially set aside $40 million to compensate firms' losses before upping the figure in its SEC submission to $62 million.

Since then, 11 letters on the offer have been sent to the SEC, with opinion divided. UBS, which claims to have lost $357 million and is threatening legal action, has slammed the proposal, as has Citi, which calls Nasdaq OMX "grossly negligent" in its letter.

In contrast, Citadel and Knight Capital - which recently faced its own costly tech meltdown - have backed the offer, which Nasdaq OMX has once again sought to justify in its own letter to the SEC.

The exchange operator says that the "vast majority" of its 560 members have raised no objection to the plan. It argues that those that are objecting are doing so based on the dollar amount but warns that if the offer is kicked out, the liability limit will be just $500,000. It also notes that those that are unhappy with the plan do not have to participate.

Says the letter: "Nasdaq believes that the Accommodation Proposal establishes a fair, transparent, and equitable method of identifying the categories of members for whom Nasdaq's system issues caused objective, discernible loss, quantifying the amount of that loss, and making payments that consider the member's commitments to compensate their investor customers."

Comments: (0)

Comment on this story (membership required)
Log in to receive notifications when someone posts a comment

Finextra news in your inbox

For Finextra's free daily newsletter, breaking news flashes and weekly jobs board, sign up now.

Related blogs

Create a blog about this story (membership required)

Related stories

23 August, 2012
31 July, 2012
29 June, 2012
11 June, 2012
07 June, 2012
30 May, 2012
23 May, 2012
18 May, 2012

Related company news


Top topics

Most viewed Most shared
More global banks back blockchain collabor...
10077 views comments | 57 tweets | 49 linkedin
Iran joins fintech revolution
7681 views comments | 20 tweets | 5 linkedin
Banks face choice to collaborate or compet...
7422 views comments | 39 tweets | 45 linkedin
Samsung Pay lands in the US
5919 views comments | 25 tweets | 24 linkedin
Worldpay trials facial recognition technol...
5667 views comments | 21 tweets | 38 linkedin

Featured job

up to £95K base, £190K OTE, benefits
London, UK

Find your next job