The Facebook IPO left some investors seething. For Jared White, it left him feeling very lucky. “I seriously got struck by lightning and survived,” the 31-year-old Austin, Texas, trader said of his experiences amid the confusion that engulfed one of the highest-profile initial public offerings ever. At around 10:45 a.m. Friday, Mr. White says, he placed an order to buy 30,000 Facebook shares, setting as his limit price $43 a share, at the opening of trading on the Nasdaq Stock Market, scheduled for 11 a.m. But the opening was delayed, and at 11:08 a.m., Mr. White accidentally canceled his orders through his firm’s electronic trading system. He pushed the wrong button on his computer, Mr. White explained, when he meant to cancel orders for a different stock. Mr. White realized what he had done at 11:13. He quickly re-entered his order, saw an indication that it was accepted by Nasdaq and settled in front of his screen to watch the action when trading finally started at 11:30 a.m…At around 1:50 p.m., the traders finally got confirmations from Nasdaq on their original orders—except for Mr. White, whose account in the Great Point system showed zero shares. He felt like he had dodged a bullet, but he was confused. “What? How?” Mr. White asked his technical-operations manager, who had been on the phone with Nasdaq all morning. He soon learned why he didn’t have any shares: Across the market, orders that had been placed between 11:11 a.m. and 11:30 a.m. had fallen into some kind of a black hole. That meant Mr. White’s re-entered order was never recognized. About the same time, revelations were hitting other traders across the market, surprising some who held shares they thought they had sold. Trading volume surged as orders flooded Nasdaq, causing a steep drop in Facebook’s price. The shares never really recovered and fell most of the rest of the day, closing at $38.23 at 4 p.m. “I was utterly relieved,” Mr. White said of his phantom trade. [WSJ]
Have you ever wondered what Ira Sorkin, Bernie Madoff’s lawyer, was doing when he got the call that his client’s business wasn’t entirely legit, per se? Wonder no longer:
“I’m sitting in [my granddaughter's pre-schoo] class and these children, two-and-a-half-year-olds, are standing around, pretending that they’re on a farm,” Sorkin said. “And the teacher is asking, ‘what sounds do you hear on a farm?’ Like a cow, moo-moo, and a duck, quack-quack. “And I’m hearing all these animal sounds, and all the kids laughing and applauding, and my cell phone rings. And it’s Bernie Madoff. And he tells me that he’s been arrested by the FBI. He’s handcuffed to a chair. He needs my help. And in the background, I’m hearing, ‘moo-moo, quack-quack, oink-oink,’ and I ran out of the class.”
Also, if he had to defend the Ponz Master all over again, would he? You betcha, Sorkin told Scott Cohn. And while we’re on the subject, the attorney is tickled by how long his clients scam was able to go on for.