JOIN USNasdaq OMX Group will offer funds to the tune of $40 million to compensate clients who were disadvantaged by technical problems that arose during the Facebook IPO on May 18, according to a statement by Nasdaq.
Under the proposal, the details of which are subject to SEC review, around $13.7 million would be paid in cash to member firms, the balance would be credited to members to reduce trading costs.
All benefits are expected to be achieved within six months for the vast majority of firms, Nasdaq said.
Nasdaq’s $40 million offer falls far behind the $100 million in losses that wholesale trading firms which trade on behalf of online retail brokerages like Knight Capital, Citadel, and units of UBS and Citigroup demanded.
Meanwhile, Nasdaq Chief Executive Robert Greifeld told the ‘Wall Street Journal’ that he and other exchange officials “owe the industry an apology” for the technical problems that marred Facebook Inc IPO last month. The Facebook stock, which was offered at $38, has plunged more than 30 per cent from their offering price.