Nasdaq Fined $10M Over Facebook IPO Failures

twoheadedboy writes "Nasdaq has been fined $10 million by the U.S. Securities and Exchange Commission over 'poor systems and decision-making' during the Facebook initial public offering. When Facebook went public on 18 May 2012, it was hoping for a major success, but technical glitches and poor decision making at Nasdaq caused real problems. The SEC said 'a design limitation' in the system to match IPO buy and sell orders was at the root of the disruption, thought to have cost investors $500 million. Orders failed to register properly, leaving banks like Citigroup and UBS in the lurch and making additional, unnecessary bids. They may still win money back from Nasdaq if legal challenges go their way."

Comments

Note the discrepancy

[Anonymous Coward]

The SEC said 'a design limitation' in the system to match IPO buy and sell orders was at the root of the disruption, thought to have cost investors $500 million.

Nasdaq has been fined $10 million by the U.S. Securities and Exchange Commission over 'poor systems and decision-making' during the Facebook initial public offering.

And people wonder why the average person hates the very idea of the stock market.

Re:Note the discrepancy

[Score Whore]

The more fundamental problem was NASDAQs inability to carry the trades so that people who were interested in trading FB stock were entirely unable to receive market indicators of the value of the stock nor were they able to modify trades. It's known that trades were cancelled shortly after FB began trading yet due to the exchanges issues the trades were settled hours later regardless of the cancellation.

Re:Note the discrepancy

[mspohr]

"Now we just need to punish the people who valuated Facebook so high."

I just don't understand this logic.
In retrospect, Facebook was priced "high" but still had lots of greedy people clamoring to buy it at that price.
Who should we punish?
- The greedy people who thought they would make a killing by flipping the stock?
or
- The greedy people at Facebook who priced the IPO to maximize revenue?

Nobody forced anyone to buy the stock. Nobody committed fraud by hiding material facts.
This is just a clusterfuck of greedy people. NASDAQ did screw up and made it harder for the greedy buyers to get in or get out and make profits. NASDAQ should pay for these screwups... and $10 million is peanuts.
I will enjoy watching all of these greedy people fight over money.

Re:Note the discrepancy

[Impy the Impiuos Imp]

> And people wonder why the average person hates the very idea of the stock market.

The average person does not hate it. Just your own little moral online tribal society hates it, where you reinforce to each other statements about the awfulness of this or that vis-a-vis politics, in support of a meme-based amalgam of people looking for power themselves.

Re:Lemme get this straight

[the eric conspiracy]

Wrong.

The problem is that Nasdaq wasn't able to deliver trade confirmations to brokerage houses and institutional buyers. This caused these organizations to try to place multiple orders that they didn't actually want, and it contributed to price uncertainty in the market.

The taint of Goldman Sachs

[GodfatherofSoul]

Once they got in and started floating that insane value for Facebook pre IPO, it should've been obvious to investors that the fix was in. If you see GS jumping in on anything, think of it as a neon "Warning: anal rape ahead" sign. Unless, you're privy to the innards of the deal of course...

Re:Why bother?

[tazan]

According to the article NASDAQ made 10.8 million profit by shorting Facebook in just one of their rule violations. So they aren't even getting fined as much as the profits they made violating the rules.

Re:How do you value a "FaceBook"?

[fuzzyfuzzyfungus]

Just remember: An 'analyst' is somebody who can make more money by selling advice on investing than he can by investing according to his own advice...