Nasdaq expects "significant" new expenses over Facebook IPO
NEW YORK |
NEW YORK (Reuters) - Nasdaq OMX Group Inc (NDAQ.O) expects to incur costs well above the $62 million it has set aside to pay back firms harmed by the glitch-ridden Facebook (FB.O) IPO, as it fights lawsuits and updates its systems, it said in a regulatory filing on Friday.
Nasdaq said it is cooperating with an investigation by the U.S. Securities and Exchange Commission into the problems at the exchange during the $16 billion IPO on May 18.
The New York-based exchange operator also said that it is the subject of eight lawsuits by investors and one by trading firms for its role in Facebook's problematic debut. Nasdaq said it believes the lawsuits are "without merit."
"Pending the resolution of these matters, we expect to incur significant additional expenses in defending the lawsuits, in connection with the SEC investigation and in implementing technical changes and remedial measures which may be necessary or advisable," Nasdaq said in the filing.
Market makers lost upward of $500 million in the IPO, when many pre-market orders were not confirmed by Nasdaq for several hours after Facebook trading began, rather than in the usual milliseconds, leaving traders unsure of what they owned.
UBS AG (UBSN.VX) said last week that it may take legal action against Nasdaq to recover the more than $350 million it lost in the IPO.
Knight Capital Group (KCG.N), which on Wednesday lost $440 million when its own software glitch flooded the stock market with errant trades, recently reported it lost $35.
(Reporting By John McCrank)
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