Banking & Financial Institutions

Nasdaq to compensate investors for Facebook IPO woes

{mosads}Investors who were unable to complete their deals during the hectic first minutes of public trading, or were unsure of their position amid the confusion, now have the chance to recoup their costs from the exchange. However, investors who lost money on the stock through their own moves are not eligible for compensation, Nasdaq said.

Nonetheless, the move by the exchange represents a substantial break from standard policy, as it typically sets a cap of $3 million on funds set aside to accommodate investors following technical problems. Under the agreement, member firms on the exchange would receive $13.7 million in cash, while the remaining amount would be doled out as forms of credit to members that pay to trade on the exchange.

The stock exchange also announced that it was tapping IBM to conduct a “thorough review” of its systems, although it said the problems of May 18 had been remedied.


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