Barrier Street firms supervising Facebook orders in the
IPO have demanded $500 million
projected in losses linked to the design imperfection in
NASDAQ’s system.
As the settlement was in addition to NASDAQ’s offer to pay
$62 million to compensate brokers that took losses trading in the Facebook inauguration.
And in the way of
braking the camp, NASDAQ agreed to pay a penalty of $10 million, the leading
ever alongside a stock exchange, for irreverenting securities laws in the
Facebook initial public offering (IPO) as the Securities and Exchange
Commission (SEC) noted in their report.
SEC mentioned the second-prime US equity market for its poor
systems and decision-making during the Facebook IPO in
May 2012 and exchanges had an obligation to ensure their systems, processes,
and contingency planning that were robust and adequate to manage an IPO without
disruption to the market as Xinhua states.
More than 30,000 Facebook commands persisted stuck in
NASDAQ’s system for more than two hours yet they should have been quickly
executed or canceled caused by this problem.
And till in today’s markets, disruptions in the systems
are written off as mere technical hiccup when it’s the policy of the systems
and the response of exchange officials that cause the most concern.
Though
NASDAQ’s high-ranking forerunner decided to initiate
trading before fully considering the problem, which then caused violations of
several rules, including NASDAQ’s essential rule governing the price-time
priority for implementing trade orders.
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