The stock exchange operator will give funds to brokerages that lost money due to Nasdaq glitches that delayed the May 18 debut of Facebook shares by half an hour.
After the stock finally started trading, would-be investors complained they were not able to confirm changes or cancellations made to Facebook orders starting as early as 4:30 a.m. PT. Later on in the morning, some traders said they had not received confirmation from Nasdaq that transactions had actually been completed.
Angry traders have demanded that Nasdaq compensate them for any losses incurred as a result of the glitch. It's estimated that the technical problems cost traders about $500 million, according to the Wall Street Journal.
Despite the approval of the $62 million payout, Nasdaq may still be subject to lawsuits or further regulatory action, the SEC said.
Nasdaq originally submitted a plan to offer up to $40 million to financial firms that lost money after the Facebook IPO. That plan would have had Nasdaq paying $13.7 million in cash to member firms that suffered losses, including the profit it made from first-day trading. The rest would come in the form of trading discounts.
Nasdaq increased the amount and said it plans to distribute the sum in cash. The Financial Industry Regulatory Authority, the industry's self-regulator, will process and evaluate all of the claim submitted to Nasdaq, the SEC said.
"We are pleased that the Securities and Exchange Commission has approved our accommodation plan, which will enable our customers, members and market participants to receive appropriate restitution as FINRA promptly begins processing claims," a Nasdaq spokesman said.
(Via The Wall Street Journal)