Tags: Nasdaq | CEO | SEC | Facebook

WSJ: Nasdaq CEO Lost Touch With SEC Amid Facebook Chaos

Monday, 11 Jun 2012 10:21 AM

The fallout of the glitch-filled Facebook initial public offering continues to settle weeks after the social network's much anticipated initial public offering.

Technical snags at the Nasdaq failed to properly execute buy and sell orders, thus creating costly confusion for many investment houses.

The Nasdaq has proposed a compensation package worth $40 million for some financial institutions who lost money amid mishandled trades during the IPO, but Nasdaq CEO Robert Greifeld admits he is still in the dark about what happened.

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"You wake up, you turn around, and there's a black or dull spot," Greifeld tells The Wall Street Journal. "You can't get away from it."

Losses may hit $500 million as snags left investors with shares they didn't want or couldn't sell.

UBS may have lost as much as $350 million investing in Facebook.

Sources tell CNBC that UBS wanted 1 million shares, and when it didn't receive confirmations due to technical glitches, it repeated the order multiple times, leaving it with more than it had intended, which left the bank sorting out a complicated trading loss.

During most of the first day of trading, Greifeld was unreachable.

Mary Schapiro, head of the Securities and Exchange Commission, called Greifeld at his office demanding explanations.

Greifeld, who monitored the situation after ringing in the opening bell at Facebook's Menlo Park, California, headquarters, was on a plane home at the time after deciding the worst of the problems were fixed, the Journal adds.

Shortly after the botched IPO, Greifeld apologized to investors.

"We have been embarrassed and certainly we apologize to the industry," Greifeld told CNBC, though he did say the exchange wasn't on the hook for losses sustained by retail investors.

"As an exchange, we have registered broker-dealers as our customers," Greifeld told the network.

"The registered broker-dealers have the retail and institutional investors. So as we look to our accommodation policy, we’re not privy to what happened at the retail level. So we obviously can only focus on what we see, and that’s our transaction with our member customers."

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