Would Facebook Inc (NASDAQ:FB) Pay A Penalty Of $41.6M?

Posted by Steve Raasch October 27, 2013 0 Comment 2521 views


The Financial Industry regulatory Authority (FINRA) has completed assessing the claims that are related to the messed-up Facebook Inc (NASDAQ:FB) Initial Public offering. The regulatory body says there is $41.6M in valid claims that have resulted from this offering. This news about FINRA completing the assessment and the related news came from the Nasdaq OMX Group, on Friday. They say the NASDAQ Stock market members will receive compensation on the basis of the analysis that has been carried out by FINRA staff.

The muddle

The claims that are covered by the ruling cover all the sell-orders that had been placed from 11.11am-11.3- am on 18 May 2012 at $42, or less, and which did not execute. It also includes orders that had been place at $42 or less, that executed under the $42 mark. This will also include the orders that had been placed at $42 and had been executed but were not confirmed immediately. Also included are the complex categories of various orders that had been placed at $42 or more but had not been confirmed and had been cancelled before 1:50PM

The problems

Facebook Inc (NASDAQ:FB) went public on 2012 May. On the day the public offering was launched, some software problems occurred on the NASDAQ exchange. These resulted in the orders being filled at the incorrect prices. This meant that certain investors ended up losing their money. FINRA handed-down their decision on Friday.

The impact

The problem that Facebook Inc (NASDAQ:FB) faced during their IPO is weighing heavily on the impending Twitter IPO and the latter has been very conservative with its statements and valuation. They want to avoid the kinds of issues that Facebook Inc (NASDAQ:FB) faced during its IPO offering. Facebook Inc (NASDAQ:FB) shares climbed above their initial levels only in the month of June 2013.



About Steve Raasch

Steve Raasch is a breaking news reporter for GDP insider. During his nearly two decades of editorial experience, Steve has covered a variety of topics including small business, health, personal finance, advertising, workplace issues and consumer behavior. Steve is very passionate about his work. Steve earned a master of arts degree in international relations from the Johns Hopkins University School of Advanced International Studies in Washington.

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