The Securities and Exchange Commission gave Nasdaq the green light to pay out up to $62 million to those who lost money after technical glitches held up Facebook’s initial public offering by a half hour.
Facebook went public in May 2012 to a number of mishaps. Before the IPO, the company was accused of a number of shady activities, including giving bankers private information about its revenue before the IPO. But when everything was said and done, and the company had made it to the trading floor, Nasdaq’s systems glitched and halted trading for a half hour. Then, would-be investors complained they couldn’t get confirmation of stock purchases or cancellations.
The ordeal cost investors money, and as a result, Nasdaq admitted the failure, offering damages. A couple weeks later, the exchange submitted its proposed compensation plan to the SEC, though it does disclaim that it is not responsible for losses incurred on the trading floor. In this case, it seems the exchange just wants to make good on a technical issue.
Those seeking compensation have a week from today to submit their requests in writing. The Financial Industry Regulatory Authority (FINRA) will be reviewing and approving each claim starting immediately. According to the SEC, Nasdaq should not issue any more cash than $62 million dollars, though losses at the time were estimated to be more thatn $100 million — and have grown to be hundreds of millions to date.
hat tip Wall Street Journal; IPO image via Facebook