Union Bank of Switzerland (UBS) is filing a lawsuit against Nasdaq OMX Group in an effort to recoup this losses from the Facebook IPO. UBS reported their second quarter results today and revealed that they recorded a loss of 349 million Swiss francs ($356.5 million) in its U.S. equities business because of the Facebook IPO.
When Facebook went public, the Nasdaq was plagued by technical problems. Facebook’s stock price has not recovered since then. Facebook’s stock price opened at $38 and now it is trading at $21.77 (as of the time this article was written).
Orders were not confirmed for several hours after the stock started trading. To ensure that the orders were filled, they were entered multiple times before the necessary confirmations from Nasdaq were received and UBS’ systems were able to process them. Nasdaq filled all of the orders, which gave UBS far more shares than clients had ordered according to UBS.
Last month Nasdaq said that they were setting up a $40 million program to compensate companies that were hit by technical problems that happened during the Facebook IPO in May. That program was upped to $62 million on July 20th by Nasdaq. Nasdaq indicated that a majority of the money would be paid via reduced trading costs, but that was changed to all-cash.