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

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

Following last month's Facebook IPO fiasco, the Securities and Exchange Commission (SEC) is pondering forcing Nasdaq OMX to upgrade its trading systems, according to the Wall Street Journal.

The SEC is investigating the 18 May IPO, which 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.

Citing people familiar with the matter, the WSJ says that the watchdog is now considering forcing Nasdaq OMX to change the way its develops, changes, tests and and implements the code used for IPOs in a bid to prevent a repeat.

On Sunday the exchange operator's CEO Robert Greifeld - who has already called in IBM to review technology and processes - admitted that "arrogance" and "overconfidence" among his employees had contributed to the problems.

Greifeld said Nasdaq executives relied too heavily on assurances from the exchange's technology group. "There was not enough of a check and balance," he said. "We did not have enough business judgment in the process."

SEC Could Seek Nasdaq Upgrading - WSJ

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