Skip to main content

The Globe and Mail

SEC approves plan for lost Facebook IPO money

A man stops to photograph Nasdaq in Times Square as Facebook has its IPO, Friday, May 18, 2012, in New York.

Richard Drew/AP

U.S regulators on Monday approved a plan to compensate market makers who lost money in a botched Facebook Inc. public offering in May on the Nasdaq exchange.

Nasdaq, a unit of Nasdaq OMX Group Inc., has proposed a revised $62-million settlement to those brokerages that lost money.

The decision from the U.S. Securities and Exchange Commission was in response to a series of high-profile glitches last year that shook the market, including the handling of Facebook's long-anticipated initial public offering.

Story continues below advertisement

The May 18 IPO, which raised $16-billion, was initially delayed by 30 minutes due to a technical problem at Nasdaq.

The exchange then decided to get the stock trading by using a secondary system that ended up leading to delays of many clients' orders and confirmations. This cost some investors and traders big losses as the stock price dropped after an initial gain.

Report an error

The Globe invites you to share your views. Please stay on topic and be respectful to everyone. For more information on our commenting policies and how our community-based moderation works, please read our Community Guidelines and our Terms and Conditions.

We’ve made some technical updates to our commenting software. If you are experiencing any issues posting comments, simply log out and log back in.

Discussion loading… ✨