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Nasdaq's Greifeld plays defense on Facebook IPO

June 6, 2012: 5:49 PM ET

Nasdaq's CEO Bob Greifeld apologized to investors and trading firms for the exchange's handling of Facebook's initial public offering, but he quickly moved on in an interview with CNBC anchor Maria Bartiromo after the close Wednesday.

Investors worried about Facebook-related losses from the glitches should talk to their brokers, not Nasdaq (NDAQ), said Greifeld.

"We can only speak to our member customers. As an exchange, we have registered broker-dealers that have retail and institutional customers," said Greifeld. "We're not privy to what happened at a retail level."

Those "member customers" are firms like Knight Capital (KCG), Citadel, UBS (UBS) and Citigroup (C) that are claiming tens of millions of dollars in losses from the Facebook (FB) glitches. Knight and its counterparts execute trades for firms like TD Ameritrade and Scottrade on Nasdaq's exchange.

While he smiled for Bartiromo, Greifeld took a decidedly unemotional stance on the losses of not only investors but also his clients. He said Nasdaq's decision to spend $40 million compensating clients for Facebook-related losses was "clinical," a term he repeated numerous times during the interview.

Nasdaq's announcement of the payout, which is pending SEC approval, did little to assuage the affected firms. "Clearly, we are disappointed that Nasdaq's compensation fund does not come close to covering reported losses from broker-dealers," said a statement from Knight Capital.

Greifeld said Nasdaq has no intention of compensating trading firms for decisions they made in an absence of information. Nasdaq didn't inform broker-dealers of what trades were executed until 1:50 p.m., more than two hours after Facebook started trading.

Instead, Greifeld touted the exchange's response as "breaking new ground" in customer relations. He called the $40 million compensation plan "a step forward. It's above and beyond anything any exchange has done before."

He didn't add that there's never been such an IPO fumble either.

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Maureen Farrell
Maureen Farrell
Staff writer, CNNMoney

Maureen Farrell is a staff writer at CNNMoney and covers Wall Street, banking, mergers and the stock and bond markets. Prior to joining CNNMoney, she covered venture capital and entrepreneurs for Forbes, and mergers and bankruptcy for Mergermarket and Debtwire, both divisions of the Financial Times.

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