Nasdaq OMX GroupCEO Robert Greifeld told CNBC Wednesday that even though "we have been embarrassed" by the botched Facebook IPO , the exchange has no direct responsibility to individual investors.
Earlier in the day, the Nasdaq proposed a "one-time" payout of about $40 million to compensate some financial firms that suffered losses from mishandled trades during the first day of trading in Facebook on May 18.
“As an exchange, we have registered broker-dealers as our customers," Greifeld said in a live interview on "Closing Bell." "The registered broker-dealers have the retail and institutional investors. So as we look to our accommodation policy, we’re not privy to what happened at the retail level. So we obviously can only focus on what we see, and that’s our transaction with our member customers."
On the first day of Facebook trading, technical glitches left the market makers — who facilitate trades for brokers and are crucial to the smooth operation of stock trading — in the dark for hours as to which trades had gone through.
Nasdaq “tested extensively” its systems before the Facebook IPO, but the testing did not reveal a “design flaw” in the system, he said.Page 1 of 2 | Next Page