The Securities and Exchange Commission approved Nasdaq's plan to pay $62 million to trading firms that incurred losses during Facebook's botched public debut last May.
The four major trading firms -- Knight Capital (KCG), Citadel, Citigroup (C) and UBS (UBS) -- lost a combined $500 million due to technical glitches at the Nasdaq during Facebook's initial public offering.
And while the accommodation plan won't compensate the firms in full, the SEC said it will "create a means of providing significantly more compensation for eligible claims, outside of litigation, than would otherwise be available."
If the SEC had rejected the plan, Nasdaq would have only been permitted to issue $3 million in compensation, according to current SEC rules.
UBS, which said it alone lost more than $350 million and previously called Nasdaq's plan "inadequate" and "insufficient," said in an email to CNNMoney that the SEC's approval does not change its opinion. The firm reiterated that it has already filed an arbitration claim against Nasdaq for the full amount of its losses that it says was due to Nasdaq's "gross mishandling of the Facebook IPO."
Citi, which had also called the proposal "insufficient" and said it should be "rejected," declined to comment.
Knight and Citadel had previously written to the SEC in support of Nasdaq's proposal, with Citadel managing director and general consul John Nagel calling the plan "objective and fair." Both firms had no comment Monday.
Jefferies Group (JEF) said early Monday that it has agreed to merge with one of its largest shareholders in an all-stock deal, sending shares of the investment banks rallying as much as 20%.
Leucadia National (LUK), which owned a 29% stake in Jefferies ahead of the news, will offer 0.81 of a share of Leucadia's common stock for each Jefferies share.
News of the all-stock deal sent Jefferies' stock soaring Monday. MOREMaureen Farrell - Nov 12, 2012 10:39 AM ET
Knight Capital Group stopped taking new trading orders Wednesday afternoon as it struggled with "power issues" and requested its clients re-route all stock orders to other trading firms, according to two traders who received a memo from the firm.
Jersey City, N.J.,-based Knight plays a key role on Wall Street by acting as a middleman in the markets, completing investors' buy and sell orders.
The company's latest snafu comes as U.S. financial markets MOREHibah Yousuf - Oct 31, 2012 2:53 PM ET
Knight Capital, once one of the fiercest critics of Nasdaq's Facebook compensation plan, has done a 180-degree turn.
"We support Nasdaq's efforts to reimburse its member firms for losses caused by Nasdaq's actions and decisions during the first day of trading in FB," Leonard Amoruso, Knight's general counsel, wrote in a letter to the SEC late Wednesday.
No one expected Facebook (FB) to debut at the opening bell on May 18, but MORECatherine Tymkiw - Aug 30, 2012 2:44 PM ET
Computerized trading problems aren't unique to the United States apparently. The main stock market in Spain was halted Monday for nearly 5 hours due to a "technical glitch," according to the index operator.
The IBEX 35 was offline from 10:05 a.m. to 2:50 p.m. local time, a spokesman for the Bolsas y Mercados Españoles said. The index rallied after trading resumed, gaining 2.8%. The spokesman said he did not yet MOREBen Rooney - Aug 6, 2012 11:24 AM ET
SEC Chairman Mary Schapiro let it be known Friday that the market regulator has taken up the gauntlet thrown down by Knight Capital's act of errantry.
The Securities and Exchange Commission will convene a "roundtable" in the coming weeks to address the "critical issues" raised by Wednesday's high-frequency foul-up, Schapiro proclaimed in a statement.
As if that weren't enough, Schapiro has also commanded SEC staffers to speed up efforts to make sure MOREBen Rooney - Aug 3, 2012 4:48 PM ET
Nasdaq's CEO Bob Greifeld doesn't have too many friends in the financial industry these days.
Greifeld nonetheless appeared ebullient as he bounded onto the stage at the Sandler O'Neill + Partners Global Exchange and Brokerage Conference in New York Thursday morning.
Greifeld's presentation followed a panel where the CEOs of two competing exchanges BATS Europe and Direct Edge decried Nasdaq's (NDAQ) plan, or "scheme" as they each called it, to spend MOREMaureen Farrell - Jun 7, 2012 12:58 PM ET
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