After keeping relatively mum in the weeks following the botched Facebook IPO, the Nasdaq’s CEO Bob Griefeld offered up an apology during a CNBC interview. And the exchange has revealed a plan to compensate clients to the tune of $40 million. However, the competition is all kinds of upset because they say its unfair. And those who lost out during the IPO say $40 million is chump change.
Greifeld said, “We have been embarrassed and certainly we apologized to the industry, but the important thing we have to do is focus on the future.” But not so fast.
“This is tantamount to forcing the industry to subsidize Nasdaq’s missteps and would establish a harmful precedent that could have far reaching implications for the markets, investors and the public interest,” said NYSE Euronext in a statement.
Knight Capital says it’s “disappointed that Nasdaq’s compensation fund does not come close to covering reported losses from broker-dealers. Their proposed solution to this problem is simply unacceptable.”
The SEC still has to approve the plan. In thinking about the future, we wonder if Greifeld will have a plan prepared for the unexpected meltdown.