Nasdaq to make Facebook compensation announcement
NEW YORK (Reuters) - Nasdaq OMX Group Inc (NDAQ.O) has reached out to at least one brokerage that lost money due to Facebook's (FB.O) botched initial public offering on the exchange, saying it will make an announcement on Wednesday, a person at the brokerage firm said on Tuesday.
Nasdaq is expected to release details of a plan to make up some losses sustained by banks and trading firms, which collectively have been estimated above $100 million, in a filing with the U.S. Securities and Exchange Commission, according to the Wall Street Journal, citing unnamed sources.
Nasdaq declined to comment on Tuesday.
Facebook shares have fallen 32 percent since the IPO when technical glitches resulted in a 30-minute delay of the IPO, unconfirmed trades and losses by market makers and retail investors.
Nasdaq's plan to pay back brokers has been slowed by regulatory questions centered on exchange's ability to compensate customers, the WSJ reported, citing people familiar with the matter.
Nasdaq's liabilities for a trading glitch are limited through regulation and a contract with its customers to $3 million per month. The exchange has applied to the SEC to increase the amount to $13.7 million to include a gain of $10.7 million it made from the Facebook IPO through the sale of so-called "phantom shares" it was left holding in the IPO.
(Reporting by John McCrank; Edited by Walden Siew and Tim Dobbyn)
- U.S. immigration protesters drop U.S. border blockade plan
- Exclusive: Angry with Washington, 1 in 4 Americans open to secession
- About 60,000 Syrian Kurds flee to Turkey from Islamic State advance |
- White House intruder was armed with knife: officials
- Exclusive: Iran seeks give and take on militants, nuclear program