SEC Approves FB IPO Compensation Plan

by Christopher Freeburn | March 25, 2013 1:10 pm

Nasdaq 300x199 SEC Approves FB IPO Compensation Plan[1]The fallout from Facebook’s (NASDAQ:FB[2]) IPO continues.

Nasdaq (NASDAQ:NDAQ[3])┬áhas agreed to pay $62 million in damages to compensation trading firms that lost money when the social media giant went public last year[4] due to technical problems with Nasdaq’s systems. The settlement has been approved by the Securities and Exchange Commission, CNN Money notes.

Citigroup (NYSE:C[5]), Citadel, UBS (NYSE:UBS[6]) and Knight Capital (NYSE:KCG[7]) will receive compensation under the agreement. The firms claim to have lost a total of $500 million due to the trading system problems[8].

Without SEC approval, the most Nasdaq could have paid out was $3 million. Last year, Nasdaq first offered a $40 million settlement plan, but later increased that.

The plan did not appease UBS, which says it lost $350 million. The bank has described the plan as “inadequate” and has launched an arbitration claim against Nasdaq.

Shares of Citigroup, UBS and Knight Capital all fell more than 1% in Monday midday trading.

Endnotes:
  1. [Image]: http://investorplace.com/wp-content/uploads/2011/05/Nasdaq.jpg
  2. FB: http://studio-5.financialcontent.com/investplace/quote?Symbol=FB
  3. NDAQ: http://studio-5.financialcontent.com/investplace/quote?Symbol=NDAQ
  4. lost money when the social media giant went public last year: http://buzz.money.cnn.com/2013/03/25/sec-nasdaq-facebook-compensation/
  5. C: http://studio-5.financialcontent.com/investplace/quote?Symbol=C
  6. UBS: http://studio-5.financialcontent.com/investplace/quote?Symbol=UBS
  7. KCG: http://studio-5.financialcontent.com/investplace/quote?Symbol=KCG
  8. total of $500 million due to the trading system problems: http://investorplace.com/ipo-playbook/dissecting-nasdaqs-botched-facebook-ipo/

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