Nasdaq caused $35 mn loss in Facebook IPO: broker
A New York broker has asked Nasdaq to compensate it for up to $35 million in losses on the Facebook initial public offering due to the market's computer problems on the first day of trade.
Knight Capital said in a filing to the Securities and Exchange Commission late Wednesday that it had submitted a claim to Nasdaq over losses related to Friday's computer problems, which disrupted buy and sell orders during the launch of the $16 billin IPO and caused havoc at many brokerages.
"As has been well-publicized, there were numerous issues and problems at Nasdaq relating to the trading of Facebook. Some market participants, including the Company, suffered sizable losses," Knight said in the filing.
"The Company estimates its total pre-tax loss related to the events associated with the trading of Facebook to be in the range of $30 to $35 million."
Knight said it had submitted claims for "financial accommodation" from Nasdaq, and that it was weighing all possible options under the law.
But it said it had no assurances it will recover any of the losses, and that its second-quarter earnings results would be affected.
(c) 2012 AFP