Nasdaq stands behind Facebook payback plan, profits up
By John McCrank
(Reuters) - Nasdaq OMX Group (NDAQ.O: Quote) Chief Executive Robert Greifeld was optimistic on Wednesday that the exchange operator's $62 million plan to compensate customers for its part in Facebook's (FB.O: Quote) glitch-ridden market debut would pass muster with firms that were harmed by the IPO.
Greifeld was speaking during a call with analysts after Nasdaq posted better-than-expected second quarter profits. The earnings release made no mention of the botched IPO, and when asked for details about the plan on the call, Greifeld referred to the 73-page filing Nasdaq made with regulators on Friday.
"That's our definitive word on the topic," he said.
But more details may soon emerge as to what went wrong on May 18 when Nasdaq glitches led to a delay in the highly anticipated $16 billion Facebook offering - and then left many investors in the dark for more than two hours as to how many shares they owned. Greifeld said a report by IBM, which the exchange hired to review the problems, is expected next week.
The all-cash repayment plan is $22 million richer than an earlier proposal, which had drawn intense criticism from market makers and other exchanges for being too narrow and for using trading credits as the main method of payment.
"I would definitely highlight the absence of negative comments with respect to the plan from the members who are directly impacted by it," Greifeld said on Wednesday.
He said the lack of criticism this time around "is seen as a relative positive and I think we in the industry are getting ready to move forward from this issue."
The plan has not yet been posted on the public register by the U.S. Securities and Exchange Commission, but once there, firms will have 21-days to submit formal comments. Continued...