Nasdaq received SEC approval for a $62 million payout to investors following the stock exchange’s botched Facebook IPO. Though it sounds like a pile of money, it’s a little more than pocket change for the estimated $500 million the errors reportedly cost investors.
The company’s IPO last May was troubled to say the least. Nasdaq’s systems halted for an hour and half the morning of the trading due to a glitch, and investors were left wondering for hours if the deals on their shares went through, trailing leaked dollars in the wake.
The exchange admitted its failure a couple of days following the sale, and submitted plans for reimbursement to the SEC, while still maintaining it was not responsible for trading floor losses.
Those looking to get on the claim must submit requests in writing, which will be reviewed by the Financial Industry Regulatory Authority. Nasdaq is not required to pay any claims exceeding the $62 million. The approval of the payout plan does not shield the exchange from further lawsuits.
Nasdaq will pay all claims in cash. The exchange had originally offered to pay $40 million and another $27 million in discounted trading fees, but investors balked with claims the settlement was insufficient.
Many investors are still disgruntled, understandably as the award covers only a little more than 20 percent of the IPO losses. UBS was quick to condemn the settlement, the Wall St. Journal reported.
Of course, anyone who now owns Facebook stock that wasn’t part of their employee compensation package has been burned by the IPO as well. Shares are currently priced at $25.20, a modest gain over its low of $18, but still far short of the opening IPO price of $40.