UBS plans to sue Nasdaq over Facebook IPO losses
July 31, 2012 – UBS joined a large list of brokers and market makers on Tuesday announcing its plans to sue Nasdaq OMX Group Inc. The bank wants to recoup its losses suffered from the initial public offering of Facebook, after the bank received a big hit in its earnings for the second quarter due to the deal.
The Swiss bank announced that profits for the second quarter were hit by a loss of $356 million following the technological problems during the IPO for Facebook in May. The IPO took a turn for the worse after a number of trading glitches led to Facebook’s opening being delayed by Nasdaq. That delay, left millions of the company’s shares unconfirmed for a number of hours.
UBS said gross mishandling of the initial public offering was done by Nasdaq, and it blamed Nasdaq for making many operational failures. The Swiss bank said it would seek complete compensation for all its losses.
Just the loss suffered by UBS dwarfs what Nasdaq promised to set aside in order to compensate companies for a portion of the losses they suffered. Robert Greifeld, the CEO at Nasdaq said last Friday that the compensation was the company’s response to the problems that occurred. Officials from Nasdaq have yet to make a comment about UBS’s statement on Tuesday.