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Swiss Bank Threatens to Sue NASDAQ Over Facebook IPO
jfruh writes "On the day of the Facebook IPO, the NASDAQ's trading systems suffered multiple failures and couldn't confirm buy orders for several hours. Big banks buying shares for their funds and customers placed multiple orders as a result, and bought more Facebook stock than they intended to as a result. NASDAQ has agreed to set up a fund to compensate them for their losses, but apparently this isn't enough for Swiss bank UBS, which is threatening legal action."
Who submitted the orders, NASDAQ or the Swiss bank?
If the system is down, don't keep submitting orders. Or keep track of them yourself? Gee, you're a big bank, you can count!
The trading systems have disclaimers which cover this kind of eventuality (order execution times not being guaranteed).
Basically it sounds like someone clicked the buy button like they were pushing an elevator button to make it arrive faster. That works, you know.
Well, judging by UBS's saber-rattling, we know who got left holding a big bag of Zuckerberg-fueled hype, now don't we?
Quo usque tandem abutere, Nimbus, patientia nostra?
if the price was going up, would they be returning the stock for a refund?
So you're saying if you pushed the elevator button and got no response (no light, nothing) you wouldn't push it again? You would just stand there with your dick in your hand hoping that the press registered?
Did they ignore the bit where it says don't hit refresh in your browser?
But then, when you buy stock in a company with no real product and it tanks to about 50% it's IPO value, you can only blame yourself and your silly Bay of Pigs attitude towards business.
A feeling of having made the same mistake before: Deja Foobar
As a swiss i'm a bit offended by this post. You're right about it beeing UBS' fault.
But the rest is PURE BS.
We have some privacy laws. Like forbiding any government (including ours!) to snoop around our finances. That's it. There will always people who abuse this. But if you want to live in a police state with no privacy fine. I'm a regular citizen, pay my taxes and i still think it's a good thing the gov can't snoop around my bank accounts.
Probably wouldn't last too long. I am sure some people would start to question why your dick was out in the first place.
"That's right...I said it."
If it was charged per press I would seriously consider some dick holding time.
True, but it depends how the system works. If you're supposed to click to buy button until you see 'transaction accepted' and they double processed the buy button that's messy. If the system said 'request timed out try again' then NASDAQ is in real trouble.
Why did anyone think this was going to be a good stock?
I assume none of the share buyers or anyone that was involved ever had or seen a FB account.
"That's right...I said it."
These are getting to be fairly frequent events. See http://www.forbes.com/sites/davidleinweber/2012/08/01/another-tech-glitch-roils-markets-how-simulation-could-help/ for comments on the problems this morning, and how traders might be able to build their own early warning systems
Author, "Nerds on Wall Street: Math, Machines & Wired Markets" Wiley, 2009 http://tinyurl.com/y93o9ol Fellow in Fin
It was the other way around. They waned to buy X shares, but the system didn't let them. So they tried again and again. Then, when system came back up, ALL of those orders went through. So they are stuck with way more stocks that lost 44% then they were planning on.
Cry more. Swiss banks knowingly and willingly aid and profit from serious crimes.
Dear Ameritard
Please stop marching into countries and shooting civilians
No, I want $1000 dollars of FB. If that's 40 shares at the time I place the order and 20 shares at the time the order is processed 4 hours later because Nasdaq screws up, I get 40 shares and a bill for $2000. It's not about trying the order 10 times because it doesn't confirm, but that you buy shares, not $$$, so if the price changes in 4 hours on IPO day, you will get screwed. And price will *always* change on IPO day.
Learn to love Alaska
Was the lack of transparency on orders a result of a risk mitigation scheme in case there weren't enough retail investors to get suckered in? Now the banks can back out at taxpayer expense.
Completely missing the point. Then it's swiss banks who should be investigated, to which i kinda tend to agree. This has absolutely nothing to do with the privacy laws.
Insulting all swiss people also isn't really helpfull here.
Troll harder.
My dick was in my hand before I got on the elevator.
You are welcome on my lawn.
Privacy laws are for everyone, good or bad - but we cant let the bad ones cause us to accept a police state
I assume none of the share buyers or anyone that was involved ever had or seen a FB account.
I would wager it was exactly the opposite. Likely the vast majority of the buyers had accounts and thought "hey, if everyone is using this, then it must be on the road to insane profitability!". The problem is none of these people realized that there was no business plan behind it - at least, none beyond selling members' personal information.
On top of that, a lot of people thought it would be the next Google. What they would have realized if they were paying attention before spending money is that in reality it is the next AOL.
Damn_registrars has no butt-hole. Damn_registrars has no use for a butt-hole.
ASCII stupid question, get a stupid ANSI
To be fair, he said "Please stop harboring tax evaders and money launderers." You (assuming same AC both posts) assumed he was talking to the Swiss Govt. He could just as easily be addressing banks as the Swiss government or people.
FWIW I agree with your principle. Privacy is good. Laws protecting your privacy are good. People can do bad and good things with their privacy. Doing bad things, privacy or not, is bad.
so get your country to make it illegal to trade with swiss banks????
i spent five minutes thinking and all i got was this crappy sig
They were also used by Jews to hide money from the Nazis.
So you're saying if you pushed the elevator button and got no response (no light, nothing) you wouldn't push it again? You would just stand there with your dick in your hand hoping that the press registered?
If I ran the risk of possibly buying a thousand shares of facebook stock every time I pressed the button, I'd start to give the 'dick in hand' strategy some serious consideration...
Except the price went down, not up, so in your scenario, investors either got more shares, or spent less money.
I love my sig.
USB, along with Barkley's and RBS (Royal Bank of Scotland) are all under investigation for rigging LIBOR. This is potentially the largest currency fraud in the history of the world. Literally 100 of TRILLIONS of US dollars may have been influenced by rigging interest rates.
http://articles.economictimes.indiatimes.com/2012-07-28/news/32906786_1_libor-global-benchmark-interest-rates-credit-card-rates
So USB getting press about how unfair NASDAQ is acting could be an attempt at a smokescreen while they deal with their own problems. It's been reported that these banks are willing to do almost anything to settle with regulators because they are terrified of the potential liability if any more information comes out. Bankruptcy is not out of the question, and neither is jail time.
One can only hope that this time these evil bastards finally get some small measure of what they deserve.
Why is Snark Required?
UBS' customers were hammering the "buy" button, UBS forwarded that along to NASDAQ, NASDAQ responded with "BRB," UBS' customers canceled all of the button mashing trades, NASDAQ delivered all of the trades, without regard to those that were canceled. UBS is right that they shouldn't be on the hook for the losses, since it was NASDAQ that caused the problem. Or at least they would have been right, if they hadn't signed a contract limiting NASDAQ's liability to a pittance. Regardless, clients were made whole, and the only ones who will be harmed by this should have known their protection from this type of loss was limited.
I hate grammar Nazi's.
I think Iran just sentenced 5 or 6 corrupt Bankers to hang. I'm kinda wishing that were done here if you know what I mean.
May the lies we live by make us strong, healthy, happy and wise - Kurt Vonnegut.
You'd have thought that those living in the land of the free would object more to government intrusion upon civil liberties.
I'm not Swiss, but to OP : you're a fucking idiot. You do not know what you are saying, literally. If you want Swiss banks to stop trading in the US, I'm sure they can.
Let them trade the shares for credit default swaps.
Read the fucking summary, they purchased multiples when the confirm was not received. Therefor they now have more dead IPO than they had wanted because a system failed to produce the appropriate response.
Allow me to introduce you to the limit order. You want to buy $1000 of FB and your screen/broker/google-finance says that it's $25/share? Send your limit order for 40 shares @ $25. If the price jumps up (regardless of the reason) you won't get filled and you'll have to try again later, but at least you're not stuck with a mystery bill for your purchase. If you sent a market order for 40 shares... well... I hope it was a good learning experience.
Yeah, in that case NASDAQ cannot be held accountable for the money they lost. If suing which is the issue id see them going after the extra cost the shares incurred.
Having said that, I'm certain NASDAQ's systems has a defined set of terms of use for traders, i.e if the system screws up we (NASDAQ) are not liable sort of thing, just like a terms of service agreement with an ISP, the net goes down people cant really sue over it.
If I was a programmer for embedded microcontrollers of elevators, I'd make sure that the elevator comes faster and overrides other requests if you push the button fast and repeatedly, but I wouldn't tell anyone ... just for fun.
You would just stand there with your dick in your hand hoping that the press registered?
If you're famous enough, the press would register that although the pictures might be censored in some ways...
Most of the banks I know spend at least $300,000 a year on equipment and salaries to block sites like facebook. Given how much they spend to stop their own staff accessing FB, why did they try and sell it to other people?
So you're saying if you pushed the elevator button and got no response (no light, nothing) you wouldn't push it again? ?
If it was $100 per press I'd give it a bit more time to respond.
No sig today...
No, an IOC order should resolve to either filled, partially filled (with the rest pending fill or cancelled), or fully cancelled within a second at most. Any longer than this and you really need to call the exchange to find out what happened or to have them remove the order from the matching engine.
Most of the time, with IOC orders, if you get filled after more than 4-5 seconds you can rightfully expect the exchange to bust those fills since that isn't really immediate or cancelled.
The amount of time you wait before calling the exchange to cancel the order directly impacts your options for resolutions later.
If you don't call about a missing order for 2 hours then you are liable for that 2 hour window. If you call immediately but they can't fix your order for 2 hours they are responsible for it (most of the time).
Way ahead of you... It's simply impossible now to open a swiss bank account with american citizenship.
It also helped the jews survive. The Nazis simply did a sort on the list with jewish bank accounts and their ammounts. They just killed and targeted everyone starting from the top. Appropriating the money themselves in the process.
Which was one of the reasons why the swiss adopted bank secrecy laws in 1935.
Plausible Deniability
you see if you have every reason to believe that said planet is suitable for a colony but it turns out that say it is inhabited by Raptors or other Apex Predators (or has a periodic EM storms) then you are in the clear.
Any person using FTFY or editing my postings agrees to a US$50.00 charge
I bet they also ignored "Works best with Internet Explorer 7, 1024x768 resolution."
UTF-8: There and Back Again
I have seen my sell orders execute at a higher price than my limit price. Also my rare limit buy orders have also executed at less than my limit price. I am not a trader so I don't know if this is the law and this is how they should operate, or my company has special agreements with our market maker and stock option managing company not to screw the inexperienced geeks like me.
sed -e 's/Chuck Norris/Rajnikant/g' joke > fact
So when you click multiple times on the shopping cart "BUY NOW" button, because you don't see the THANK YOU FOR YOUR ORDER message,
that is the fault of the vendor, and not the idiot repeatedly clicking?
If UBS had a damn clue, they would have sorted the issue out instead of repeatedly submitting orders.
Beauty is in the eye of the beerholder.
That's why they're sueing, a judge decide whether those terms are really applicable or not.
I'm not very familiary with US law, but on plenty of countries, there are terms that, even if both parties accepted them, have no actual value.
No, this looks more like a "Ooops, connection timeout error", and then clicking again. If it says error, you'd expect the transaction to not-have-completed.
They aren't committing Swiss crimes.
Oh, that's right. We get to tell other nations how to act. Might makes right and all.
So it's legal to sell drugs, guns, and people in Switzerland?
Can't you simply place BID/ASKs? You could bid 40@$25 and leave it up all day - if the price drops enough you'll get shares, and if somebody is trying to unload they might lower their offer price when they see your order in the book.
My understanding is that this is how the market actually works anyway, so I never got why consumers just end up doing market/limit orders.
What you are describing is a limit order. Some people use the terms "bid" and "ask" to describe "buy" and "sell" orders that rest in the order-book before passive execution, in which case "limit" is implied.