Nasdaq Could Face Suits Over Facebook IPO
June 7, 2012 by UPI - United Press International, Inc.
NEW YORK (UPI) — Knight Capital Group, a Jersey City, N.J., securities firm, said Wednesday it is considering suing over the bungled Facebook initial public offering.
The company, headquartered in Jersey City, estimated it lost $35 million due to problems that delayed trade confirmations for as long as 2 hours, the Los Angeles Times reported Wednesday.
Nasdaq OMX Group Inc. presented a plan Wednesday to provide a total of $40 million in compensation to all trading firms involved that Knight called “simply unacceptable.”
Losses overall have been estimated at $100 million. The Nasdaq plan includes only $13.7 million in direct compensation with the rest taking the form of trading discounts, which has upset the rival New York Stock Exchange.
The U.S. Securities and Exchange Commission was investigating the May 18 IPO, sources told the Times.
“We continue to review the matter and have drawn no conclusions,” a spokesman, John Nester said.
The price of Facebook shares has dropped about one-third since the IPO.