UBS (NYSE:UBS) has written a letter to U.S. regulators that Nasdaq OMX Group‘s (NASDAQ:NDAQ) proposed $62 million compensation proposal for the mishandling of the Facebook (NASDAQ:FB) IPO is “inadequate,” Reuters has reported.
On the day of the Facebook IPO, Nasdaq’s computers failed to handle the influx of order cancellations. Because of this, the trade confirmations suffered long delays. Unfortunately, UBS traders kept re-entering orders!
The investment firm claims it has lost more than $350 million on the transaction, and other Wall Street firms have claimed big losses. One is Citigroup (NYSE:C), which also wrote a letter to regulators that accused Nasdaq of “gross negligence.”
However, these firms might have an uphill climb in getting their money back. Stock exchanges’ liabilities are capped at $3 million, so it is at the discretion of Nasdaq as to what it wants to pay.