The fallout from the botched Facebook IPO continues as Swiss banking giant UBS announced it took a $356 million hit on the hotly-anticipated stock sale and that it intends to sue Nasdaq OMX Groupfor what it calls the stock market’s “gross mishandling” of the deal.

The reported loss confirms earlier speculation that UBS's loss would top $350 million.

Sources within the bank said UBS’s trading desk electronically booked orders for Facebook stock, but failed to receive proper confirmation. That prompted traders to re-send the trades, leading to duplicated orders that far exceeded UBS’s intended allocation, these people said.

They said UBS is confident that its trading desk was not at fault, which is why it's seeking to recoup its losses from Nasdaq in the courts.

However, UBS's loss from the trade was 10 times worse than other market makers, prompting speculation about how much Nasdaq may really be to blame. By comparison, Nasdaq's plan for compensating customers who lost money on the deal totals just $62 million.

Facebook’s IPO was plagued by missteps and trading errors that caused other investors to be shut out of the deal altogether.

UBS News & Analysis

 Lackluster Debut Strains Hopes of HK IPO Revival - 23 May 2013 EDT

 Stocks Good Until Summer, Then Watch Out: Expert - 15 May 2013 EDT - CNBC.COM

 Singapore's Wealthy Probed in Hunt for Tax Cheats - 05 May 2013 EDT

 Hong Kong's IPO Market Heats Up With 2 Huge Deals - 05 May 2013 EDT

 Jim Cramer: Shifting Winds Sweeping Over Street - 02 May 2013 EDT - CNBC.COM

 More UBS News