The Securities and Exchange Commission announced Wednesday the punishment for Nasdaq’s mishandling of Facebook’s initial public offering: a record $ 10 million fine, the largest penalty paid to the SEC by an exchange. Nasdaq came under fire for several mishaps, such as failing to send trade confirmations to investors.
Sister site SocialTimes reported on Nasdaq’s penalty, showing the SEC’s complaints:
According to the SEC’s report, a design limitation in Nasdaq’s system that matches IPO buy and sell orders disrupted the Facebook stock offering. Nasdaq’s senior leadership team discussed the issue and decided not to delay the start of secondary market trading in Facebook shares, mistakenly believing that they had fixed the problem by removing a few lines of computer code.
Daniel Hawke, head of the SEC Enforcement Division’s Market Abuse Unit, commented on Nasdaq’s mishaps:
Too often in today’s markets, systems disruptions are written off as mere technical “glitches” when it’s the design of the systems and the response of exchange officials that cause us the most concern.
Readers: Do you feel that Nasdaq’s fine should have been higher?