Nasdaq Scrutinized for Facebook IPO Investor Compensation PlanBy: Shawn Hess - June 7, 2012
Yesterday, Nasdaq announced it was finally making some reparations to investors who were effected by the mysterious computer glitch that plagued Facebook trading the morning of the IPO launch.
You might recall, they set aside over $40 million in order to handle claims made by larger investment firms who either couldn’t buy, or couldn’t sell at the current market price due to the glitch.
Well, this proposal to compensate the investors isn’t sitting well with some folks, and they think it’s darn right illegal. William O’Brien, chief executive of Direct Edge Holdings, addressed a conference put on by Sandler O’Neill and Partners, and told them, the Nasdaq compensation plan is a, “shameless attempt to turn a big investor-confidence-eroding event into a competitive advantage. I think Nasdaq’s going to have to go back to the drawing board. We’re going to vigorously object in any form we can“.
Other investors at the event seemed to agree with O’Brien and shared in his sentiments calling the deal, “a bad idea” and the wrong way to go about correcting the problem. Of course, we all saw this coming. In our coverage yesterday, I raised the question of whether the Nasdaq proposed compensation would spur-on as many lawsuits as the Facebook IPO itself.
I guess it’s just another thorn in everybody’s side stemming directly from Facebook’s much anticipated, and now notorious, IPO. I’m sure they’re all celebrating, “we finally went public, and now everybody hates us”. As always, we’ll keep you updated on all the shenanigans with the Facebook IPO. Oh yes, I almost forgot, Facebook stock closed at $26.31 today, not really any change to report there.