Remember the Facebook IPO? The Nasdaq certainly does, and not only because it was a humiliating catastrophe for the exchange, but because people keep suing it even though, as it and the courts have pointed out, it can’t be sued for mucking up little things like the most important IPO in its history. Indeed, as Nasdaq was quick to note, no one had ever won one red cent by suing it over a trading error. Until now, that is.
In a first for a U.S. stock exchange, Nasdaq OMX Group on Thursday agreed to pay $26.5 million to settle a class-action lawsuit involving its bungling of Facebook Inc's $16 billion initial public offering, the plaintiffs' lawyers said….
The settlement is significant because exchanges are responsible for policing their own markets and therefore are legally immune from private liability for damages incurred when they are performing regulatory functions like conducting an IPO.
But before you get all excited for the next time it fucks up one of your orders, know this: The Nas is ready to be infallible once more. (Although you are welcome to participate in its entirely voluntary compensation program, UBS.)
The settlement should not have any effect on exchange immunity, Nasdaq Chief Executive Officer Robert Greifeld said in an interview….
"We are just happy to be able to move on," Greifeld said, adding that insurance would cover most, if not all, of the settlement.