The NASDAQ OMX Group has agreed to pay the U.S. Securities and Exchange Commission a $10 million penalty to settle charges related to "poor systems and decision-making" during Facebook Inc.’s initial public offering and subsequent trading. The agency called the penalty "the largest ever against an exchange." It noted that, despite a general expectation that Facebook’s IPO would be among the largest ever, a flaw in NASDAQ’s system for matching IPO buy and sell orders caused disruptions. "NASDAQ then made a series of ill-fated decisions that led to the rules violations," the SEC said.
The SEC reported that after the problems emerged, senior NASDAQ leaders decided during a conference call not to delay secondary market trading. That led to several rules violations. Also, more than 30,000 Facebook orders were stuck in NASDAQ’s system for more than two hours instead of being executed or canceled right away. Another 8,000 orders were delayed from being entered into the auction from 11:11 a.m. to 11:30 a.m.
