Nasdaq in settlement talks with SEC over Facebook IPO: WSJ

News of the Facebook IPO is seen on the Times Square news scroller across from the Nasdaq Market site in New York, May 17, 2012.

(Reuters) - Nasdaq OMX Group Inc is in preliminary talks with U.S. securities regulators over a possible settlement for the glitch-ridden stock market debut of social networking site Facebook Inc, the Wall Street Journal reported on Tuesday, citing people with knowledge of the discussions.

A settlement with the Securities and Exchange Commission would likely include a $5 million penalty for Nasdaq, the newspaper said.

Major market makers and broker dealers say they lost upward of $500 million because of technical glitches during Facebook's May 18 stock market debut.

"We are working closely with the Securities and Exchange Commission to resolve issues that arose from the events of May 18," Nasdaq spokesman Joe Christinat told Reuters.

Nasdaq offered a compensation plan in September of $62 million for firms harmed in the debut, but the proposition received mixed reviews with UBS AG, Citigroup Inc and other parties speaking out against it.

The SEC could not immediately be reached for comment by Reuters outside of regular business hours.

(Reporting by Tej Sapru in Bangalore, additional reporting by John McKrank in New York; Editing by Cynthia Osterman)