CNN, — The Securities and Exchange Commission approved Nasdaq’s plan to pay $62 million to trading firms that incurred losses during Facebook’s botched public debut last May.
The four major trading firms — Knight Capital (KGC), Citadel, Citigroup (C) and UBS (UBS) — lost a combined $500 million due to technical glitches at the Nasdaq during Facebook’s initial public offering.
And while the accommodation plan won’t compensate the firms in full, the SEC said it will “create a means of providing significantly more compensation for eligible claims, outside of litigation, than would otherwise be available.”
If the SEC had rejected the plan, Nasdaq would have only been permitted to issue $3 million in compensation, according to current SEC rules.
UBS, which said it alone lost more than $350 million and previously called Nasdaq’s plan “inadequate” and “insufficient,” said in an email to CNNMoney that the SEC’s approval does not change its opinion. The firm reiterated that it has already filed an arbitration claim against Nasdaq for the full amount of its losses that it says was due to Nasdaq’s “gross mishandling of the Facebook IPO.”
Citi, which had also called the proposal “insufficient” and said it should be “rejected,” declined to comment.
Knight and Citadel had previously written to the SEC in support of Nasdaq’s proposal, with Citadel managing director and general consul John Nagel calling the plan “objective and fair.” Both firms had no comment Monday.
Nasdaq first proposed a $40 million compensation plan last June, and then boosted the amount to $62 million in July.
