NEW YORK — The Nasdaq Stock Market said Wednesday that it plans to hand out $40 million in cash and credit to reimburse investment firms that got ensnared by technical problems with trading Facebook stock.
FINRA, the financial industry’s self-regulatory group, will review claims for compensation.
Facebook went public May 18 amid great fanfare. But computer glitches at the Nasdaq plagued the day. They delayed the opening of trading by half an hour and kept some investors from buying shares in the morning, selling them later in the day, or even from knowing whether their orders went through.
Some investors have complained that the technical problems left them holding shares that they didn’t want.
Nasdaq will pay about $14 million in cash to investment companies that file valid claims. The rest will be given as credit for the costs that firms have to pay to trade on the Nasdaq.
Nasdaq has traditionally imposed a $3 million cap for reimbursing customers because of technical problems.
Facebook stock originally priced at $38 and closed that first day at $38.23. Nasdaq has said it was embarrassed by the glitches, but that they didn’t contribute to the underwhelming first-day returns.
Nasdaq says it will reimburse investment firms that tried to sell shares at $42 or less but either couldn’t sell or sold at a lower price than they intended. It will also reimburse investment firms that bought at $42 whose trades weren’t immediately confirmed.
Facebook shares rose 94 cents to close at $26.81 Wednesday.
The Facebook offering has left a bad taste for many investors. Many also think that Facebook as well as Morgan Stanley, the main bank that underwrote the deal, priced the shares too high and issued too many of them.