How Much Is Nasdaq Going to Pay for Facebook Glitch?
Nasdaq is working to fix some of the mess after its embarrassing glitch during the Facebook (NASDAQ:FB) initial public offering on Friday. The stock exchange announced it will have federal regulators review the problems, and may offer financial restitution for investors who did not get shares at the price they wanted.
“Exchange Members impacted by the error are reminded that they may seek financial accommodation from NASDAQ pursuant to NASDAQ Rule 4626 if they submitted IPO cross-eligible orders between 11:11 and 11:30 AM Friday, May 18, that were marketable at the opening cross price of $42.00 and those orders either did not execute or were executed at an inferior price,” the statement read.
The Financial Industry Regulatory Authority will review these requests from investors and report on the total value of claims to Nasdaq. “The total accommodation pool shall be the amount approved by the NASDAQ OMX and NASDAQ Stock Market Boards, in their sole discretion, after receiving FINRA’s report. Please note that the pool will include all unintended gains from NASDAQ’s assumption of transactions during the cross due to the technical error,” the statement added.
Eric Noll, Nasdaq’s executive vice president for transaction services, said the company was “rebuilding the entire book” to determine which investors should be compensated.
On Sunday, Nasdaq had acknowledged that technical problems had affected trading in millions of shares. “This was not our finest hour,” Nasdaq OMX Group (NASDAQ:NDAQ) chief executive Robert Greifeld said in a conference call. Greifeld said a malfunction in the trading-system’s design for processing order cancellations had caused the problem.
Investing Insights: Trading Targets: What Facebook Halo??