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Nasdaq said its board will set aside some $40 million to repay investors who lost money during the Facebook IPO.Click here for updates >
Under the proposal, Nasdaq would make cash payments of $13.7 million to member firms impacted by trading issues during Facebook’s first trading day, with the remainder made through credits to member trading desks.
The exchange said it came to the $13.7 million figure after looking at gains it had booked from holding shares, past payouts, as well as its estimated Facebook-related revenue over the next five years.
Nasdaq will make payments to banks trading if they issued sell orders below $42 that did not execute, issued sell orders that executed at inferior pricing below $42, or entered buy trades for $42 at the open but were not immediately confirmed.
The SEC must still approve Nasdaq’s plans.