Sun, Jun 10, 2012 - Page 11 News List

NASDAQ glitch may have cost UBS millions

AP, NEW YORK

Swiss bank UBS AG may have lost up to US$350 million because of technical glitches on the NASDAQ stock exchange the day Facebook went public, reports says.

CNBC and the Wall Street Journal, citing people familiar with the matter, reported UBS is now mulling legal action against NASDAQ.

UBS spokeswoman Karina Byrne confirmed the bank lost money due to NASDAQ technical issues when the social networking firm’s stock began trading on May 18.

Byrne declined to disclose the amount, but said it was “not material” to the bank. She said UBS has not taken legal action, but is weighing its loss-recovering options.

“Given the size of our US equities business and our role as a major market maker, UBS was affected by these issues, as we believe other market participants may have been,” Byrne said in a statement.

NASDAQ declined comment on the reports on Friday.

The US$350 million figure dwarfs previous estimates for the combined losses resulting from technical glitches at NASDAQ during Facebook’s first day of trading. This week, the exchange said it would hand out US$40 million in cash and credit to reimburse investment firms.

Facebook Inc’s initial public stock offering was one of the most widely anticipated market debuts in years, but it quickly turned chaotic.

The opening was delayed by half an hour. Then, technical problems kept many investors from buying shares in the morning, or selling them later in the day, or even knowing whether their orders went through. Some investors complained they were left holding shares they did not want.

According to CNBC and the Journal, UBS placed an order for 1 million shares, but this was not confirmed and so repeated the order several times and ended up with much more stock than it intended.

Facebook’s stock originally priced at US$38 and closed that first day at US$38.23, disappointing those hoping for a first-day surge. NASDAQ has said it was embarrassed by the glitches, but that they did not contribute to the underwhelming returns.

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