Nasdaq is once again feeling the sting of its botched handling of the Facebook IPO, this time as the company faces a lawsuit from UBS. The Swiss bank is suing the exchange after losing $356 million.
In its lawsuit UBS said:
“As a market maker in one of the largest IPOs in US history, we received significant orders from clients.”
The agency goes on to note:
“We will take appropriate legal action against Nasdaq to address its gross mishandling of the offering, and its substantial failures to perform its duties.”
The lawsuit comes at a time when UBS reported second-quarter profits of $435, down by 58% year-over-year and 49% less than the previous quarter. The bank overall fell far short of analyst expectations as the international market continues to take hits in Greece, Italy and various other parts of the world.
On the day of the Facebook IPO the stock exchange experienced technical difficulties which at first delayed trading and then confused traders who were not sure if their trades were processed. In UBS’ case the company ended up placing the same order “multiple times” which in turn left the company with far more shares than they needed which fell to nearly half of their overall value.
In its statement UBS noted:
“As market marker in one of the largest IPOs in US history, we received significant orders from clients, including clients of our wealth management businesses. Due to multiple operational failures by Nasdaq, UBS’s pre-market orders were not confirmed for several houses after the stock had commenced trading.”
Nasdaq quickly apologize and admitted that its computer systems had failed to properly handle the Facebook IPO. Shares at Facebook quickly tumbled and have yet to fully recover.
Investors have filed suit en masse after watching billions of dollars in Facebook value literally disappear overnight.