Nasdaq parent Nasdaq OMX Group agreed to a $ 26.5 million settlement of a class-action lawsuit over the technical issues that plagued Facebook’s initial public offering May 18, 2012, Reuters reported.
The stock exchange suffered issues on the day of Facebook’s IPO that led to its opening being delayed and orders being stuck in its system for hours, and Nasdaq paid out $ 41.6 million in claims to brokerage firms at the end of 2013.
The class-action suit settled Thursday claimed that Nasdaq violated federal and state laws by failing to disclose potential technology issues in its IPO systems, and failure to properly design and test them, Reuters reported, and Vincent Cappucci, one of the lawyers representing the retail investor plaintiffs, told Reuters:
This is the first case that we are aware of where a class of investors has sued an exchange for market disruption, and the court has sustained those claims.
Nasdaq CEO Robert Greifeld told Reuters the exchange set aside $ 31 million for Facebook IPO-related litigation, and insurance would cover most or all of Thursday’s settlement, adding:
We are just happy to be able to move on.
Readers: What do you think of the settlement?
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