SHARING AMERICA'S TECH NEWS FROM THE VALLEY TO THE ALLEY
Nasdaq has agreed to pay $10m (£6.6m), the largest penalty ever levied against a stock exchange, to settle civil charges stemming from mistakes made during Facebook’s initial public offering last year.
Facebook founder Mark Zuckerberg signs his name and rings Nasdaq’s opening bell from California as the social network floats on the stock exchange Photo: EPA
6:42PM BST 29 May 2013
The US Securities and Exchange Commission (SEC) said that Nasdaq’s series of “ill-fated decisions” on the day of the IPO led to regulatory violations, Reuters reported.
As a result, more than 30,000 Facebook orders remained stuck in Nasdaq’s system for more than two hours when they should have been either executed or cancelled, leaving investors in the lurch and causing market makers to lose an estimated $500m.
“This action against Nasdaq tells the tale of how poorly designed systems and hasty decision-making not only disrupted one of the largest IPOs in history, but produced serious and pervasive violations of fundamental rules governing our markets,” said George Canellos, co-director of the SEC’s enforcement division.
The exchange operator agreed to settle the charges without admitting or denying the allegations.
The exchange has also separately agreed to pay as much as $62m to compensate market makers for losses in a plan approved by the SEC earlier this year.
Thank you. TiA.