Investor Sues Nasdaq Over Facebook IPOBy: Mike Fossum - May 23, 2012
Maryland Facebook investor Phillip Goldberg has just filed a complaint against Nasdaq OMX Group Inc. regarding “badly mishandled” trades upon the social network’s IPO. Goldberg aims to represent a group of investors who saw orders not processed correctly, which prompted them to lose money. Goldberg went through Charles Schwab to try to trade shares, and perhaps ran into some snags – The screen below is what I’d encountered when I’d tested out a trade on the day of the IPO:
Goldman claimed that Nasdaq had acted negligently, stating, “Orders placed by investors seeking to purchase Facebook shares during the first trading day often took hours to execute. In the meantime, the investors seeking to purchase those shares had no idea if their trades had executed, and, accordingly, had no idea if they owned Facebook shares at all.”
Nasdaq or Facebook have yet to comment, though technical glitches have so far been the general excuse for the problems experienced during initial FB trading, to where investors lost money because their buy, sell or cancellation orders weren’t going through. Facebook just settled on a lawsuit concerning its Sponsored Stories feature, and as more details emerge regarding possible misleadings during the IPO, it’s possible the network might end up in court again. There is a chance that a bit of hot water will ensue for underwriters of the IPO, if rumors of Facebook’s revised revenue reports have merit.