Nasdaq Boosts Facebook IPO Settlement To $62M

By David Cohen 

As expected, Nasdaq announced its plan to compensate investors affected by the technical issues that marred Facebook’s initial public offering, upping the total that it will pay out to $62 million from its previous proposal of $40 million.

Immediately after the IPO, which was blemished by delays in order confirmations, Nasdaq had announced that it would set aside at least $13 million to make good on traders’ losses — a figure that was nowhere near acceptable, as NBC News’ Market Day pegged losses by the top four market makers in the offering — UBS, Citigroup, Knight Capital Group, and Citadel Securities — at more than $115 million.

The embattled exchange increased its payout to $40 million in early June, but much of it was in trading discounts, which did not sit well with the Wall Street community. The newest proposal is all-cash.

Market Day reported that affected firms will have to waive their right to take legal action against Nasdaq in order to receive their portions of the settlement.

Nasdaq CEO Robert Greifeld said in a statement, as reported by Market Day:

We deeply regret the problems encountered during the initial public offering of Facebook. We failed to meet our own high standards based on our long history of providing outstanding technology to our members and exchange customers. We have learned from this experience and we will continue to improve our trading platforms.

Readers: Do you think the affected firms will find this settlement to be acceptable?