Nasdaq’s chief executive has apologised for the stock market’s handling of Facebook’s initial public offering and outlined a plan to offer $40m in compensation.
Robert Greifeld, Nasdaq’s CEO, said he and other exchange officials “owe the industry an apology” for the technical problems that dogged last month’s massive share sale by the social network.
Neither the apology nor the plan are likely to appease angry stock brokers who are suing the exchange and claim delays and other technical glitches cost them and their customers tens of millions.
Knight Capital, one of Wall Street’s biggest market makers, has already filed a suit against the exchange claiming it lost as much as $35m because of Nasdaq’s mishandling of the Facebook IPO. It called Greifeld’s plan “unacceptable”.
“Clearly we are disappointed that Nasdaq’s compensation fund does not come close to covering losses by broker-dealers like Knight that traded Facebook shares on behalf of average investors … and who suffered losses as a result of Nasdaq’s failures,” the firm said in a statement.
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