Not enough, UBS tells SEC, over Facebook loss refund

ZURICH, SWITZERLAND – The SEC (Securities and Exchange Commission) in the US said yes to a payback plan of $62 million drafted by Nasdaq OMX Group to compensate companies that lost money over Facebook’s “glitch-ridden market debut”, as Reuters puts it. One of the big losers was market leader Swiss banking giant UBS, which said Monday 25 March that even if the SEC thinks $62 million is enough, it doesn’t agree.

It is seeking arbitration to resolve its claim that Nasdaq cover its loss.

The bank was widely estimated to have lost more than $350 million during the 18 May 2012 IPO (initial public offering). It sued Nasdaq for “gross mishandling” of the flotation in late summer 2012. The Guardian cited UBS at the time: “‘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.’ The bank entered orders “multiple times” and left UBS with more shares, which fell sharply in price, than it believed it requested.

It was not alone. Forbes reported in July 2012 that “While the scale of the reported loss is far bigger than any others disclosed to date, UBS is not the only firm dealing with losses as a result of the Facebook flub by Nasdaq. Knight Capital Group has disclosed a $30-$35 million loss and reports have also touched on losses at Citadel and Citigroup.”