19 August 2017
Find out more

Nasdaq OMX defends $62m Facebook compensation package

20 September 2012  |  5658 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)

Finextra news in your inbox

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

Related stories

Citi slams Nasdaq OMX over Facebook IPO compensation

Citi slams Nasdaq OMX over Facebook IPO compensation

23 August 2012  |  5410 views  |  0 comments
SEC could make Nasdaq OMX upgrade systems over Facebook IPO - WSJ

SEC could make Nasdaq OMX upgrade systems over Facebook IPO - WSJ

29 June 2012  |  5950 views  |  0 comments
Nasdaq OMX offers brokers $40m over Facebook fiasco

Nasdaq OMX offers brokers $40m over Facebook fiasco

07 June 2012  |  5426 views  |  0 comments
Facebook share fall triggers circuit breaker

Facebook share fall triggers circuit breaker

30 May 2012  |  7186 views  |  0 comments
Facebook IPO fallout continues as investor sues Nasdaq OMX

Facebook IPO fallout continues as investor sues Nasdaq OMX

23 May 2012  |  6127 views  |  0 comments
Facebook float tests Nasdaq resilience as stock opening delayed

Facebook float tests Nasdaq resilience as stock opening delayed

18 May 2012  |  6365 views  |  0 comments

Related company news

 

Related blogs

Create a blog about this story (membership required)
download the paper nowvisit www.worldpaymentsreport.comvisit www.dorsum.eu

Top topics

Most viewed Most shared
Mobile contactless spending accelerating in UKMobile contactless spending accelerating i...
8612 views comments | 23 tweets | 23 linkedin
Norwegian banks and startups form fintech clusterNorwegian banks and startups form fintech...
7657 views comments | 19 tweets | 23 linkedin
RBS to bring Silicon Valley to EdinburghRBS to bring Silicon Valley to Edinburgh
6873 views comments | 10 tweets | 7 linkedin
hands typing furiouslyWhy Blockchain Might Not Be The Future For...
6333 views 1 | 5 tweets | 3 linkedin
Apple sidelined as Beijing transit system launches payments appApple sidelined as Beijing transit system...
6175 views comments | 11 tweets | 9 linkedin

Featured job

Find your next job