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 Nasdaq said previously it would pay up to $41.6 million in claims to
market participants that lost money when a glitch in Nasdaq's system
during the IPO prevented timely order confirmations for many
traders, leaving them unsure about their exposure for hours and, in
some cases, for days afterwards.
Nasdaq said a total of $41.6 million in claims qualified for
compensation, even though market makers estimated they lost $500
million collectively.
Firms that qualified for compensation had until Dec. 23 to agree
not to sue Nasdaq over the IPO in order to be eligible for a
one-time voluntary payout.
While Nasdaq was fined $10 million by the U.S. Securities and
Exchange Commission, the largest fine ever for an exchange, the
snafu was just one of a raft of high-profile technology glitches
that have plagued exchanges in recent years.
In August a software bug paralyzed thousands of Nasdaq-listed stocks
marketwide for three hours. That happened just days after a
technical problem at Goldman Sachs sent a flood of erroneous orders
to the U.S. equity options markets.
After the Nasdaq outage, the U.S. Securities and Exchange Commission
called the heads of all of the exchanges to Washington to discuss
ways to strengthen critical market infrastructure and improve its
resilience when technology fails.
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Other major glitches include BATS Global Markets' botching of its
own market debut, which it had to abandon, just months before
Facebook's IPO. And on Aug. 6, the exchange operator faced an
outage on one of its markets of nearly an hour.
CBOE Holdings Inc experienced a glitch in April that shut down the
Chicago Board Options Exchange, the No. 1 U.S. stock-options market,
for half a day, preventing trading in options on two of the U.S.
market's most closely watched indexes.
At IntercontinentalExchange Group's NYSE Euronext unit, a bug in new
software being rolled out in September briefly led to a trading halt
across U.S. options markets.
(Editing by Kenneth Barry)
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