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Wasn't Landing The Facebook IPO Supposed To Make Money For The Nasdaq?

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In a word, yes. In two words, yes, but

Nasdaq OMX Group Inc.'s (NDAQ) first-quarter earnings dropped 51%, weighed down by outlays related to the botched Facebook Inc. (FB) stock-market debut and acquisition-related charges.

In March, the exchange group sealed plans to pay out $62 million to compensate customers for technical errors in the May 2012 Facebook offering, and set aside $10 million in anticipation of settling a regulatory investigation into Nasdaq's handling of the episode.

On the bright side, it totally won't happen again. Unless and until it does.

The head of Nasdaq OMX Group Inc. said Wednesday that the exchange operator had made "great progress" in addressing the problems it had handling last year's flotation of Facebook Inc….

Mr. Greifeld said in an interview that Nasdaq had improved the way the exchange develops its market software following recommendations by International Business Machines Corp., which it hired to review its internal systems after the problems with Facebook. Nasdaq also reorganized its technology management.

"When you think about what we've accomplished in the past year, it's impressive," Mr. Greifeld said.

Facebook Costs Hit Nasdaq's Profit [Dow Jones via WSJ]
Nasdaq Cites Progress in Addressing Facebook Problems [WSJ]

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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

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 take your best shot. Nasdaq Claims Strong Defense [WSJ] Related: UBS Not Sweating The Small Stuff

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