Original URL: http://www.theregister.co.uk/2013/04/09/citi_to_file_facebook_claim_nasdaq/

Citi to file claim with Nasdaq over Facebook IPOcalypse

Joins UBS in tussle for cash from teeny compensation pot

By Brid-Aine Parnell

Posted in Financial News, 9th April 2013 10:46 GMT

Citigroup is planning to file a claim for its piece of the $62m compensation pot Nasdaq is required to dole out after the Facebook IPOcalypse.

The bank is all set to apply for the existing compensation, but it's still leaving its other options open, according to the sources whispering to the Wall Street Journal and Reuters.

Citi lost around $20m in the Facebook debacle, when technical glitches at the market meant that trades weren't registered or went through at a different time, and therefore a different price, than when they were ordered.

While the sum is not to be sniffed at, it pales in comparison to UBS's losses, which the bank puts at over $350m. It said last month that it had already filed with Nasdaq to get all of that money back because of the exchange's "gross mishandling" of the first day of Facebook share trading.

Brokers and banks have been critical of Nasdaq's small compensation pot, arguing that the market should be liable for all of the IPO losses, amounting to hundreds of millions of dollars.

As a stock exchange, Nasdaq has some regulatory immunity from claims, such as a standing cap on any liability for technical glitches of $3m a month. But Citi said in a letter to the Securities and Exchange Commission last year that the market was operating as a for-profit company during the IPO and so should be liable for all of the losses. ®