16 April 2014

Judge rejects Nasdaq OMX bid to dismiss Facebook IPO lawsuits

17 December 2013  |  1382 views  |  0 NASDAQ Trading screen

A US judge has denied Nasdaq OMX's request to dismiss lawsuits filed by investors who say that they lost money thanks to the exchange operator's botched handling of the Facebook IPO.

US District Judge Robert Sweet accepted Nasdaq OMX's argument that as a 'self-regulatory organisation' (SRO) it is immune from some claims, including those relating to its decision to stop the IPO last May.

However, he decided not to dismiss negligence claims over the design, testing and touting of the exchange's systems, including that stress tests were not carried out, according to Reuters.

Plaintiffs allege that Nasdaq failed to share enough information, causing them to lose money through failed trade executions and possible artificial downward pressure on the stock's price.

In March Nasdaq OMX agreed to settle SEC charges - and pay a $10 million fine - without admitting or denying them. It has also put together a $62 million compensation package for affected firms.

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