Nasdaq fined over Facebook failure

Nasdaq OMX has been fined $10 million to settle regulatory charges that its “poor systems and decision-making” led to dramatic disruptions in the launch of Facebook’s $16bn initial public offering, TASS reported.

On the day of the I.P.O. on May 18, 2012, when it was time to begin trading there was a delay of 25 minutes due to technical glitches caused by excessive demand. The deluge of orders sent Nasdaq’s computer programs into a continuous loop, rendering it impossible to establish a correct opening price for Facebook stock.

As a result, more than 30,000 investors for two hours did not know the status of their orders to buy and sell shares, and were “trading blind.”

The total damage from the glitch is estimated at $500 million. According to experts, after the emergence of the problems, NASDAQ ought to have cancelled the trading.

NASDAQ has already agreed to pay $62 million to the brokers who lost money because their Facebook orders were improperly handled.