NASDAQ is setting aside $31 million to deal with their colossal screwup during the Facebook IPO

A picture illustration shows a Facebook logo reflected in a person's eye, in Zenica, March 13, 2015. REUTERS/Dado Ruvic Thomson ReutersA picture illustration shows a Facebook logo reflected in a person’s eye, in Zenica

Nasdaq OMX Group said on Thursday it set aside $US31 million for ongoing litigation arising from the bungled $US16 billion initial public offering of Facebook Inc on its U.S. stock exchange in May 2012.

The reserve is intended to cover the estimated amount of a settlement of class-action litigation initiated on behalf of investors in Facebook common stock on the date of its IPO, the company said in a filing related to its financial results.

Facebook’s first day of trading was plagued by technology problems, resulting in a delayed opening and tens of thousands of trade and cancellation orders being stuck in Nasdaq’s system for more than two hours.

While market makers lost an estimated $US500 million on Facebook’s IPO, federal regulators in 2013 approved a plan for Nasdaq to repay only about $US41.6 million.

However, Nasdaq said on Thursday its reserve would also cover expected costs of re-opening the company’s voluntary compensation program for firms that lost money due to the issues during the IPO, but did not submit a claim in 2013. Firms will be able to submit a claims during the second quarter of 2015, subject to the same conditions as the claims that were filed in 2013, the company said.

Reopening the compensation program should fully resolve claims by UBS Group AG’s market making arm, Nasdaq said in the filing.

In October, a divided U.S. appeals court rejected UBS’s bid to recoup more than $US350 million of losses related to the Facebook IPO from Nasdaq through arbitration.

Separately, Nasdaq agreed in May 2013 to pay a record $US10 million penalty to settle U.S. Securities and Exchange Commission charges over its alleged “poor systems and decision-making” for the IPO. The exchange operator did not admit wrongdoing.

Nasdaq added on Thursday that some or all of amounts paid from the loss reserve would likely be reimbursed by insurance coverage.

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This article originally appeared at Reuters. Copyright 2015. Follow Reuters on Twitter.

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