Nasdaq defends $62 million Facebook payoutSeptember 20, 2012: 2:17 PM ET
In a letter sent to the Securities and Exchange Commission late Wednesday, Nasdaq (NDAQ) called the payout "fair and equitable."
The exchange operator told the SEC that, by law, it only owes trading firms, or so-called market makers, $500,000 based on SEC limits. "The proposed accommodation pool goes well beyond what is required under current Nasdaq rules and specifically prioritizes the compensation of investors," Nasdaq's senior vice president, Joan Conley, wrote in the letter.
Nasdaq originally offered $40 million in June, but a month later, it raised the payout to the current $62 million, which Nasdaq CEO Bob Greifeld called "definitive." At the time, customers publicly excoriated Greifeld and Nasdaq for under-compensating investors.
But most eventually came around. Nasdaq said in its letter that the "vast majority of its 560 members have raised no objections to the plan.
Even Knight Capital Group (KCG) -- one of the most vocal opponents -- and Citadel changed their tune.
Knight, of course, ran into own trading glitches in early August. Some in the industry have called Knight's own nearly fatal technical glitches karmically-induced (Knight CEO Tom Joyce was Nasdaq's most vocal and persistent critic).
Nasdaq's stock regained all the ground it lost in the wake of Facebook's botched debut. Facebook, however, hasn't been as lucky. Despite a recent rally, Facebook's shares are still down 40% from its IPO price.