• 14 Jun 2012 at 4:03 PM

Nasdaq Officials Would Just Like To Point Out That Anyone Who Lost Money As A Result Of The Exchange’s Incompetence Have Little To No Legal Recourse

By

Oh you can try a lawsuit but, historically speaking, it won’t do shit.

Nasdaq is sending a message to firms weighing lawsuits related to trading losses in Facebook’s initial public offering: winning won’t be easy. The exchange operator believes it is protected by its contracts with members and by its unusual legal status, which is rooted in its dual role as a regulatory body as well as a business that makes money running markets. Exchange officials in recent weeks have pointed out to analysts that Nasdaq has never been successfully sued over a trading error. “When you look at member agreements that people sign, it’s quite explicit that they’re bound by that accommodation policy,” Robert Greifeld, Nasdaq’s chief executive, said last week at a Sandler O’Neill + Partners conference, referring to legal agreements capping the exchange’s payouts linked to system problems…Banks and brokers have estimated they lost hundreds of millions of dollars due to technical problems during Facebook’s May 18 debut.

The glitches forced Nasdaq to delay Facebook’s opening, and left trades involving millions of shares unconfirmed for hours. Amid the chaos, traders were forced to guess their positions and place additional orders based on those estimates. When Nasdaq delivered the results of the trading Friday afternoon, many firms were caught off guard and scrambled to reposition.

According to Greifeld, the last guy who tried to get his money back “trades on the pink sheets now” but, again, take your best shot.

Nasdaq Claims Strong Defense [WSJ]
Related: UBS Not Sweating The Small Stuff

Comments (57)

  1. 1
    Posted by Guest | June 14, 2012 at 4:12 PM

    Guess its time to start slashing some tires.

    -Vigilante guy

  2. 2
    Posted by JohnnyCanes | June 14, 2012 at 4:16 PM

    I estimate my client's losses to $315 million. Please remit check asap.
    - Dewey and Leboeuf

  3. 3
    Posted by structured prods | June 14, 2012 at 4:21 PM

    send em to the tsx

  4. 4
    Posted by guest | June 14, 2012 at 4:23 PM

    Robert looks appropriately smug in the story photo.

  5. 5
    Posted by Deleveraging | June 14, 2012 at 4:29 PM

    Anyone who traded that piece of shit deserved to lose money.

  6. 6
    Posted by guest | June 14, 2012 at 4:30 PM

    tell it to my lawyers at Dewey & LeBoeuf

  7. 7
    Posted by investorcluzo | June 14, 2012 at 4:30 PM

    when I said "nothing is f*cked," I was just talking about us…
    -R. Greifeld

  8. 8
    Posted by Jack | June 14, 2012 at 4:47 PM

    grammar… anyone "has" not "have"

  9. 9
    Posted by Niko | June 14, 2012 at 4:52 PM

    More like BAWSAQ, amirite?

  10. 10
    Posted by guest 1 | June 14, 2012 at 5:38 PM

    Hey, if you don't like us, there's always BATS.

  11. 11
    Posted by Anonymous | June 14, 2012 at 5:51 PM

    Too bad you can’t throw your risk team under the bus here.

    – Jamie D.

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    Posted by Darwin | June 14, 2012 at 6:57 PM

    Buying facebook and losing is the the thinning of the economic herd

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    Posted by Guest | June 14, 2012 at 4:28 PM

    Greifeld, just a heads up pal, the "never has happened, never will happen" approach…not as rock-solid as you would think.

    - AIG FP

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