UBS has rejected a recently approved $62 million (CHF58 million) compensation package intended to make up for a computer glitch in the Facebook flotation. UBS lost CHF331 million in the botched trade – the lion’s share of the total losses.This content was published on March 26, 2013 - 12:40
The United States Securities and Exchange Commission (SEC) approved the Nasdaq stock exchange’s repayment package on Monday, stating that while it does not cover all the institution’s losses, it is “significantly more compensation for eligible claims, outside of litigation, than would otherwise be available.”
But UBS spokesperson Serge Steiner said the bank intends to seek compensation for the full extent of its losses.
“We already filed two letters to the SEC telling them this amount would not be sufficient, and their approval of the plan doesn’t change our opinion,” he told swissinfo.ch.
UBS is pursuing legal action in the form of arbitration proceedings against Nasdaq, in which both parties have the opportunity to come to an agreement behind closed doors.
UBS played a lead role in the Facebook initial public offering and suffered more than two-thirds of the total estimated $500 million losses in the computer error, which occurred in May 2012 when Facebook stock went public for the first time.
A computer problem at Nasdaq, the exchange that handled the share trading, led confused investors to buy much more Facebook stock than originally intended.
In addition to UBS, the financial institutions Citigroup Inc, Knight Capital Group and Citadel LLC suffered heavy losses when the systems failure left traders unsure of where they stood in the highly competitive race for Facebook shares.
Facebook’s stock has fallen more than 30 per cent from the price originally set by underwriters and is currently trading at around $25 a share.
Knight Capital and Citadel have said they support the Nasdaq compensation proposal, while Citigroup has also written letters to the SEC opposing it.
This article was automatically imported from our old content management system. If you see any display errors, please let us know: firstname.lastname@example.org