NEW YORK, June 6 (Reuters) - Former Securities and Exchange Commission Chairman Harvey Pitt on Wednesday commended Nasdaq OMX for its initiative to compensate clients for its handling of Facebook Inc’s bungled initial public offering last month, but he called the steps “too limited.”
The harm caused by Nasdaq’s failures easily exceed the $40 million the exchange has set aside, Pitt said, responding to a query by e-mail. He also said there does not seem to be any rationale for how the number was arrived at or why it is fair.
Nasdaq “deserves kudos for taking the bull by the horns, and not waiting for the SEC to finish its review,” Pitt said. “But I think the steps it has taken - while positive - are too limited. The dollar estimates for harm caused by Nasdaq’s failures easily exceed - several times over - the $40 million it has set aside.”