WATCH: Elevation Partners’ Roger McNamee Says Nasdaq’s Behavior Is “Criminal”

Posted Jul 13, 2012

Roger McNamee is a tech investor that works at Elevation Partners. McName co-founded Elevation with U2 lead singer Bono. Elevation has invested in companies like Palm and Facebook. McNamee is not happy with the Nasdaq’s behavior in regards to the Facebook IPO. In an interview with Bloomberg, he said that Nasdaq and Morgan Stanley were to blame for Facebook’s IPO errors and that it “bordered on criminal.” He said that the Facebook IPO put a spotlight on the “extreme corruption” in Wall Street.

“You watch what all of these people have been doing in secondary markets. Do you think it is a coincidence that every secondary offering trades down five or six days before the offering. Then they price it down 15%, and then it pops? It sure looks to me like the underwriters are shorting the stocks. What I am saying is i look at all of this and as a 30-year investor, I think people on Wall Street have just so totally lost track of honesty….It is staggering,” said McNamee.

McNamee has been an early advisor at Facebook. He said that high frequency trading and a lack of regulation is a big problem. He also believes another error that Morgan Stanley and Nasdaq made was allow people to cancel orders during the quiet period of the company three days before and not canceling the offering after discovering that the system was working earlier that morning.

“Let’s say for example there are 25 things you have to get right on an IPO. They blew at least 24 of them… So, NASDAQ clearly is at fault for not cancelling and postponing the offering. And, Morgan Stanley is at fault for increasing the size of the deal and price with a complete absence of demand,” said McNamee.

Check out the video below: