Nasdaq OMX Group Inc will compensate firms on December 31 for qualifying
claims related to Facebook's botched May 2012 initial public
offering, the exchange operator said in a note to traders on Friday.
said previously it would pay up to $41.6 million in claims to market
participants that lost money when a glitch in Nasdaq's system during the
IPO prevented timely order confirmations for many traders, leaving them
unsure about their exposure for hours and, in some cases, for days
Nasdaq said a total of $41.6 million in claims
qualified for compensation, even though market makers estimated they
lost $500 million collectively.
Firms that qualified for
compensation had until December 23 to agree not to sue Nasdaq over the
IPO in order to be eligible for a one-time voluntary payout.
Nasdaq was fined $10 million by the U.S. Securities and Exchange
Commission, the largest fine ever for an exchange, the snafu was just
one of a raft of high-profile technology glitches that have plagued
exchanges in recent years.
(Also see: Nasdaq to pay $10 million fine over Facebook IPO debacle)
In August a software bug paralyzed
thousands of Nasdaq-listed stocks marketwide for three hours. That
happened just days after a technical problem at Goldman Sachs sent a
flood of erroneous orders to the U.S. equity options markets.
the Nasdaq outage, the U.S. Securities and Exchange Commission called
the heads of all of the exchanges to Washington to discuss ways to
strengthen critical market infrastructure and improve its resilience
when technology fails.
(Also see: Nasdaq in settlement talks with SEC over Facebook IPO: Report)
Other major glitches include BATS Global
Markets' botching of its own market debut, which it had to abandon, just
months before Facebook's IPO. And on August 6, the exchange operator
faced an outage on one of its markets of nearly an hour.
Holdings Inc experienced a glitch in April that shut down the Chicago
Board Options Exchange, the No. 1 U.S. stock-options market, for half a
day, preventing trading in options on two of the U.S. market's most
closely watched indexes.
At IntercontinentalExchange Group's NYSE
Euronext unit, a bug in new software being rolled out in September
briefly led to a trading halt across U.S. options markets.
© Thomson Reuters 2013