Finally, we have a deal.
After months of waiting, the SEC has approved a Nasdaq OMX Group (NDAQ) proposal to create a $62 million fund for compensating those who lost money due to trading errors during Facebook's (FB) troubled IPO.
Who gets the cash? See if you can decipher this byzantine language, taken directly from the SEC order specifying the arrangement:
"Specifically, Nasdaq proposes to compensate market participants for certain claims related to system difficulties in the Nasdaq Halt and Imbalance Cross process ('Cross') in connection with the Facebook IPO."
Confused? You should be.
"Market participants" could be anybody, including retail investors who lost an estimated $630 million the day Facebook went public.
The order subsequently defines eligible customers as brokers and dealers. So, from the looks of it, Joe and Jane Oddlot shouldn't expect to receive a check.
Calls to Nasdaq OMX seeking clarification weren't returned by the time this article went to press.
More likely, we're talking about "market makers." Think of them as Wall Street's matchmakers. Rather than hooking up guys and gals with potential mates, these geniuses wield computers to pair would-be traders with the stocks they want to buy or sell.
The SEC filing doesn't names names, but we know that Citigroup (C) and UBS (UBS) were among those that handled millions of transactions on behalf of clients, a portion of which the Nasdaq concedes weren't executed at agreed-upon prices or in a timely fashion.
Losses ensued. And they're still piling up.
Shares of Facebook are off more than 33 percent so far, or about $40 billion in market value.
So while it's nice to see Nasdaq pay up for its errors, $62 million is a relative pittance for those who are out so much more.
Photo Credit: Getty Images
Motley Fool contributor Tim Beyers has no position in any stocks mentioned. The Motley Fool owns shares of Citigroup and Facebook and has recommended buying shares of Facebook. The Motley Fool has bought calls on Facebook.
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