Nasdaq pays out 40m dollars for Facebook fiasco

Nasdaq OMX Group has decided to return 40 million dollars to those brokers whose orders were mishandled in Facebook's initial public offering (IPO) due to technical errors.

Specifically, the US stock exchange operator said it will pay $13.7m in cash and the remaining amount would be credited via lower trading fees for those brokers that were affected. A series of glitches when Facebook went public delayed the start of trade by half an hour and left many trades unexecuted.

The compensation plan must be approved by the Securities and Exchange Commission (SEC) and, if passed, Nasdaq expects all benefits to be paid out within six months.

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Nasdaq traded up 1.72% yesterday to close at $22.24. Facebook -which has fallen 29.4% since its debut at $38- rebounded 3.64% yesterday to close at $26.81.

JM