Nasdaq said to be settling with SEC over Facebook flop
When Facebook's IPO stumbled out of the gate last spring, investors looked for someone to blame. Many critics looked to Nasdaq and their technical glitches for fumbling the launch of the social media giant. Now it looks like the market maker is going to have to pay for their disastrous handling of the new stock.
The Wall Street Journal is reporting that Nasdaq may settle with the U.S. Securities and Exchange Commission to the tune of $5 million.
While this seems like a paltry sum, cnet writes:
Sources familiar with the matter have told the Journal that Nasdaq has been in preliminary settlement talks with the SEC. If the two sides do make a deal, it will most likely include a financial penalty that could be as much as $5 million. Additionally, the stock exchange will probably be required to take steps to avoid future technical errors.
The SEC initiated the investigation after Facebook's Nasdaq debut last May when technical problems delayed trading for 30 minutes. This delay caused confusion and uncertainty among investors, and some traders were not able to confirm changes or cancellations made to Facebook orders until later in the day. All and all, the glitch cost traders an estimated $500 million in losses, according to the Wall Street Journal.
Nasdaq is reportedly revamping its IPO systems after the Facebook debacle and planning some sorts of compensation of to investors as well.
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