UBS (NYSE:UBS) is planning to take legal action against Nasdaq OMX Group (NASDAQ:NDAQ) to recoup losses it made related to the Facebook (NASDAQ:FB) IPO, the company said alongside the release of its second-quarter results on Tuesday. The bank said “the gross mishandling of Facebook’s market debut by Nasdaq” resulted in it recording a loss of $356 million in its U.S. equities business during the quarter.
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Facebook’s trading debut on May 18 was marred by technical problems on the Nasdaq stock exchange. Due to the system failures, Nasdaq failed to confirm several orders for a few hours and some orders were entered multiple times before the necessary confirmations were received. Nasdaq ultimately filled all of the orders, giving UBS far more shares than clients had ordered, the bank said.
UBS was harsh in its criticism. “As market marker in one of the largest IPOs in US history, we received significant orders from clients, including clients of our wealth management businesses,” the bank said in a statement. “Due to multiple operational failures by Nasdaq, UBS’s pre-market orders were not confirmed for several houses after the stock had commenced trading.”
Nasdaq OMX had announced last month it would set up a $40 million compensation program for trading firms hit by the mishap, including UBS and Citibank (NYSE:C). That amount was increased to $62 million earlier this month by the exchange, which accepted it had failed to meet standards during the IPO. However, the offered amount still falls way short of the Wall Street’s total estimated losses.
UBS said on Tuesday it planned to seek full compensation for its losses.