Nasdaq says filing $62 million Facebook compensation plan
WASHINGTON (Reuters) - Nasdaq OMX Group Inc (NDAQ.O) said on Friday it will file a $62 million compensation plan for firms that lost money in the bungled Facebook Inc (FB.O) initial public offering in May.
The fund is $22 million larger than the original fund proposed in June, Nasdaq said. All accommodations will be paid in cash, a departure from the prior plan in which Nasdaq would have partially compensated firms through trading credits or rebates.
The compensation plan will be filed with the Securities and Exchange Commission, Nasdaq said, adding that it expects all payouts to occur within six months.
Nasdaq's original plan drew criticism from market makers who say they lost upwards of $200 million because of technical glitches on the IPO. It also drew criticism from other exchanges, which said the trading credits would force the firms to trade on Nasdaq.
"We deeply regret the problems encountered during the initial public offering of Facebook," Nasdaq CEO Robert Greifeld said in a statement. "We failed to meet our own high standards based on our long history of providing outstanding technology to our members and exchange customers."
Greifeld said the exchange has learned from the experience and will continue improving its trading platform.
The Financial Industry Regulatory Authority, Wall Street's self-regulator, has agreed to evaluate claims submitted under the program. The filing of the accommodation program with the SEC begins a comment period, Nasdaq said.
Facebook's $16 billion IPO was to have been the culmination of years of breakneck growth for a social network that became a cultural and business phenomenon. But the shares of the eight-year-old company founded by Mark Zuckerberg in his Harvard dormitory room have sagged since going public at $38 a share.
(Reporting By Rick Rothacker and Karey Wutkowski; editing by Bernard Orr and Andre Grenon)