UBS sues Nasdaq over $357 million IPO loss

If you take a look at the UBS quarterly report, you can read the specifics of their claim (quoted below and available in full on the UBS website). Essentially, the bank asserts that NASDAQ initiated buy requests multiple times. Had Facebook stock sky-rocketed, as anticipated, I wonder if we would have ever heard a word of this?<p>"Due to multiple operational failures by NASDAQ, UBS’s pre-market orders were not confirmed for several hours after the stock had commenced trading. As a result of system protocols that we had designed to ensure our clients' orders were filled consistent with regulatory guidelines and our own standards, orders were entered multiple times before the necessary confirmations from NASDAQ were received and our systems were able to process them. NASDAQ ultimately filled all of these orders, exposing UBS to far more shares than our clients had ordered. UBS's loss resulted from NASDAQ's multiple failures to carry out its obligations, including both opening the Facebook stock for trading and not halting trading in the stock during the day. We will take appropriate legal action against NASDAQ to address its gross mishandling of the offering and its substantial failures to perform its duties."

<i>UBS sues Nasdaq and Facebook over $357 million IPO loss</i><p>The article doesn't mention anything about UBS suing Facebook, only Nasdaq. Can you update the title to take this into account?<p>Edit: title now updated, thanks! :)

What they should actually do is fire the bozos handling client orders in their wealth management group.<p>Having built multiple systems for automated trading and traded manually, it's really trading systems 101 to know that unacknowledged orders should be treated as live until you know otherwise and should never be repeated. Second, when you connect to Nasdaq via FIX or their proprietary protocol, one of the parameters you are allowed to specify is and ACK timeout. So if the exchange was getting around to acknowledging an order with a client timestamp that is more than ACK timeout old it is auto-cancelled. It seems from talking to multiple people that multiple firms including UBS hadn't set an ack timeout at all.

Until a few weeks before the offering, FB was going to price at $28 per share. Why is anyone surprised that the $38 price had no support?

Can someone shed some light onto how common of an occurrence this is? It seems like the world of finance is frequented by trigger-happy lawyers and that this might be a commonplace occurrence.

A bank sues stock marked over some number fluctuation caused by social network and all that produces millions of profits for the lawyers :) . If I would be more naive I'd say "Let them all burn down". But since all that translates to billions of real money and can possibly harm entire countries in some cases (like the LIBOR scandal) we can only watch and wonder how did we come here...

They need to fire the employees who thought investing in Facebook was a good idea in the first place.

I'm pretty sure NASDAQ has their asses covered with armor-clad underwear so thick that a bunker buster penetrator missile will feel impotent.<p>That said, time to load up the popcorn machine.