Nasdaq OMX Group has compensated firms with qualifying claims for the botched 2012 Facebook IPO.
The exchange this week paid out about US$41.6 million to firms with submitted claims for the Facebook IPO mishap on 18 May, 2012, when the first day of trading Facebook stock was delayed for around 25 minutes because of an error. This prevented Nasdaq OMX from creating an opening price.
In a note to traders last Friday, Nasdaq said it had applied to the US Securities and Exchange Commission (SEC) to pay out valid claims, initially scheduled for on or about 7 February, on 31 December.
The exchange was initially planning to reimburse investors by discounting trading fees, but instead decided to pay all compensation in cash.
Nasdaq will refund members if, during the Facebook IPO, they had cross sells priced at US$42 or less did not execute or executed at an inferior price, or if buys executed were not adequately confirmed. Buys that executed but were not confirmed and attempted to cancel have also been added as a class of order eligible for reimbursement under the revised plan.
Affected members had seven days to lodge a claim, which were reviewed by the Financial Industry Regulatory Authority.
The problematic Facebook IPO listing is just one technical issue suffered by US exchanges recently. The New York Stock Exchange in November briefly mislabeled all trades on its data feed, for example.
The apparent increase in frequency of exchange errors led the SEC to meet with exchange leaders in September and has forced participants to shore up trading systems.