How many acronyms can you fit in one sentence? Please see the above headline, which pertains to a settlement reached by the Securities and Exchange Commission (SEC) that will see the NASDAQ (National Association of Securities Dealers Automated Quotations — the more you know!) paying out $10 million for bungling Facebook’s IPO, or Initial Public Offering last year. Whew, try saying that sentence three times fast. Or even once.
This is the largest penalty ever to be paid out over an exchange, and it’s because of violations of securities laws related to “its poor systems and decision-making during the initial public offering (IPO) and secondary market trading of Facebook (FB) shares,” the SEC said in a statement, via CNNMoney.
You might recall all the brouhaha about Facebook’s IPO last year, when everyone thought it would just be the most exciting, thrilling IPO ever in the entire history of all the world. And then came the problems.
Shares started trading a half hour late, traders complained that their orders weren’t being completed and others were getting shares at higher prices than they’d expected. Metaphorical fists started flying in the form of lawsuits and Nasdaq took a lot of heat for mucking things up.
The technical glitch was part of a “design limitation in NASDAQ’s system to match IPO buy and sell orders caused disruptions to the Facebook IPO,” explained the SEC. That caused more than 30,000 Facebook orders to sit around for over two hours, when, the SEC says,”they should have been promptly executed or canceled.”
“Exchanges have an obligation to ensure that their systems, processes, and contingency planning are robust and adequate to manage an IPO without disruption to the market,” the SEC said.
SEC charges Nasdaq over botched Facebook IPO [CNNMoney]