Flickr/proimosUBS has announced quarterly earnings, and with it, has spelled out for the first time, how the botched Facebook Initial public offering opening day cost it hundreds of millions (as had been previously reported).
Specifically, it says that operational failures at the NASDAQ caused it to lose 349 million Swiss Franc (which today is about $356 million.
From the report:
Due to the gross mishandling of Facebook’s market debut by NASDAQ we recorded a loss of CHF 349 million in our US Equities business as a result of our efforts to provide best execution for our clients.
In addition, revenues were impacted by a loss of CHF 349 million related to the Facebook initial public offering.
As a market maker 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 hours after the stock had commenced trading.
As a result of system protocols that we had designed to ensure our clients’ orders were filled consistent with regulatory guidelines and our own standards, orders were entered multiple times before the necessary confirmations from NASDAQ were received and our systems were able to process them.
NASDAQ ultimately filled all of these orders, exposing UBS to far more shares than our clients had ordered.
UBS’s loss resulted from NASDAQ’s multiple failures to carry out its obligations, including both opening the Facebook stock for trading and not halting trading in the stock during the day.
Due to multiple operational failures by Nasdaq, orders were not confirmed for several hours after the stock had commenced trading, according to UBS.
We will take appropriate legal action against NASDAQ to address its gross mishandling of the offering and its substantial failures to perform its duties.
Although as in all such matters there can be no assurance as to the amount of any recovery we may obtain, we intend to pursue compensation for the full extent of our losses.
Kenneth Kennedy is a business journalist based in Hong Kong, China. Kenneth has a passion for financial markets and breaking news stories and loves writing about business news, stock market, and economic opinions that matters most to its audience. Kenneth spends a lot of time discovering and researching latest financial markets and industry news stories in order to make sure the latest and greatest stories are brought to you first on BigBoardNews.com.