{"id":15533,"date":"2013-05-28T20:05:24","date_gmt":"2013-05-28T20:05:24","guid":{"rendered":""},"modified":"2013-05-28T20:05:24","modified_gmt":"2013-05-28T20:05:24","slug":"Nasdaq-pays-US-10m-fine-in-Facebook-IPO-","status":"publish","type":"post","link":"https:\/\/asiancemagazine.com\/?p=15533","title":{"rendered":"Nasdaq pays US$10m fine in Facebook IPO"},"content":{"rendered":"

The Nasdaq exchange agreed to pay a US$10 million penalty for trading glitches during the initial public offering for Facebook last year, officials said.<\/strong><\/p>\n

The Securities and Exchange Commission said the fine imposed was the largest ever against an exchange.<\/strong><\/p>\n

The huge electronic market’s foul-up marred the US$16 billion Facebook share issue on May 18 of 2012, the most hotly awaited initial public offering on the US markets in years.<\/p>\n

Nasdaq is also facing lawsuits from investors who claim the glitches led to losses when they were unable to execute trades.<\/p>\n

The SEC said “a design limitation in Nasdaq’s system” led to the disruptions to the Facebook IPO, and as a result violated securities laws.<\/p>\n

Exchanges “have an obligation to ensure that their systems, processes, and contingency planning are robust and adequate to manage an IPO without disruption to the market,”<\/strong> the stock market watchdog said.<\/p>\n

It said the glitches allowed “more than 30,000 Facebook orders to remain stuck” for more than two hours when they should have been executed or cancelled.<\/p>\n

“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 enforcement for the SEC.<\/p>\n

The glitch dealt a black eye to the exchange, which trades some of the world’s largest companies, including Apple and Microsoft.<\/strong><\/p>\n

Nasdaq has set aside US$62 million to pay out claims related to the Facebook debacle. But some investors are suing, claiming the losses were greater.<\/p>\n

Source AP<\/em>
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