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One day after admitting it screwed up, Nasdaq is planning to make things right with investors who lost money over trading glitches during the Facebook IPO. Nasdaq is planning to spend $13 million to make amends for bad trades that weren’t processed, reports the Wall Street Journal.
Nasdaq took a lot of heat for computer problems that negatively affected the Facebook IPO. Trading didn’t start on Friday May 18 until 11:30 am EDT, because the computers that run the Nasdaq couldn’t process the large volume of trades.
Nasdaq chief exec Robert Greifeld told reporters Sunday that the exchange was at fault for trading problems during the IPO. The computer system backup led to traders not know if their orders went through for hours and many times, they found out too late that shares weren’t available at the price they wanted. Greifeld also said Sunday that the Nasdaq wasn’t responsible for any losses that happened due to computer errors. Now it seems the exchange is changing its tune.
Thirteen million might not be enough to fix the situation though. It’s estimated that investment firms lost $100 million, according to the Wall Street Journal. Because it would take a long time to investigate each loss recorded by every investor, Nasdaq is hoping to make amends now and put this mess behind it.
Of the $13 million, $10 million will come from proceeds Nasdaq earned when it acquired and sold Facebook shares while trying to work out computer delays and glitches. Security exchange rules mandate that Nasdaq can only pay out $3 million in one calendar month. The SEC will have to approve the decision before it can move forward with its plan.