Nasdaq is going to spend $40 million to compensate for trading losses caused by glitches during Facebook's stock market debut last month, but that doesn't mean much for small investors who got burned.
Most average investors put in orders for Facebook shares on opening day through brokerages like Fidelity, Charles Schwab (SCHW) and Scottrade, but those firms aren't direct recipients of Nasdaq's payout.
"Nasdaq's accommodation program is an agreement between the exchange and its member firms that directly routed their orders to Nasdaq," said Michael Cianfrocca, a Charles Schwab spokesman. "As Schwab did not route orders directly to Nasdaq, we are not participating in this program, however, we continue to assess individual client situations and address concerns as best as we can."
Brokerage firms like Schwab route their orders through so-called market makers like Knight Capital (KCG), Citadel, Citigroup (C) and UBS (UBS), which are the Nasdaq (NDAQ) member firms that will get paid from the $40 million pot.
Fidelity spokesman Stephen Austin said that the brokerage has "successfully resolved a large number of disputes" of clients' botched Facebook orders directly with market makers. He added that Fidelity is continuing to work closely with market makers and others "to clarify what additional resolution, if any, might be available for our customers."
Scottrade said it is carefully reviewing the details of Nasdaq's plan "to understand how it may impact the firm and our clients and determine the appropriate course of action."
Meanwhile, shares of Facebook (FB) continue to spiral downward. The stock hit an all-time low of $25.52 on Wednesday. Though shares have bounced back from that level, they remain 30% below the IPO price of $38.
It's been two weeks since technical glitches at the Nasdaq caused mass confusion during Facebook's big debut, and investors are still outraged as they deal with the aftermath.
Despite their best efforts, there's been little word of progress -- in fact, little word of any sort -- from the bigger players involved.
Nasdaq (NDAQ), the root of all the woes, has been the most tight-lipped of all. Numerous spokespersons at the exchange have MOREHibah Yousuf - Jun 1, 2012 3:45 PM ET
|China will import American rice for the first time|
|Why you should see 'Dunkirk' in 70mm|
|Kushner and Ivanka Trump detail big tech stake, art and hundreds of millions in assets|
|Sean Hannity will no longer receive Buckley Award after controversy|
|Brazilian plane takes on an American military icon|