UBS Securities has estimated its Facebook IPO losses at USD356 million when Nasdaq technical failures led to a delay in order confirmations during Facebbok's May 18 IPO. NASDAQ's system failures caused UBS's systems to re-enter orders multiple times and leaving it with a huge position of unwanted stock.
UBS is the latest financial firm to be unimpreesed at NASDAX OMX's USD62 million proposal to compensate customers who lost money during Facebook‘s bungled IPO.
In a letter sent to the SEC on Wednesday, UBS called on the regulatory agency to reject the exchange’s proposal.
The UBS in its letter said "UBS ended up with a substantial unintended long position in Facebook shares, the liquidation of which -due to the rapid decline in the price of Facebook stock both on the day ofthe IPO and in the days and weeks after -resulted in losses in excess of$350 million. Simply put, Nasdaq's proposal to pay $62 million in the aggregate for all Facebook-related claims is woefully inadequate. We strongly urge the Commission to reconsider the level ofthe proposed cap in light ofthe actual damages caused by Nasdaq in its mismanagement of the Facebook IPO."
Citadel which is said to have lost around USD30 million in the IPO, wrote to the SEC in support of Nasdaq's plan.
Citadel's letter to the SEC said in part "While the extent of exchange immunity from liability for mishandling orders is an important and complex public policy issue, we submit that any commission consideration of this issue should be addressed at a later time."
