Regulators approved Nasdaq OMX Group’s $62 million compensation plan for firms that lost money in Facebook’s glitch-ridden market debut, a victory for the exchange operator that also set the stage for potential lawsuits from firms seeking more.
The Nasdaq plan will give retail market makers far less than the $500 million in estimated losses from Facebook’s initial public offering. Nasdaq said in a note to traders Monday that the Securities and Exchange Commission approved the plan and that firms had one week to submit requests for compensation.
A systems failure at Nasdaq on May 18 prevented timely order confirmations for many market participants, leaving them trading in the dark in the midst of the leading online social network’s long-awaited IPO.
UBS has pegged its losses from the problematic IPO at more than $350 million. It said it has already filed an arbitration demand against Nasdaq to fully recover losses because of the exchange’s “gross mishandling the IPO.”
Other market makers that took losses in the botched IPO include units of Citigroup, Knight Capital Group and Citadel. It was not immediately clear whether any other firms planned to take legal action to try to recover their full losses. Knight, Citi and Citadel declined to comment.
Centrica, the United Kingdom’s largest household energy supplier, signed a 20-year deal to import natural gas from the United States, securing supplies as production from British North Sea fields decline.
Centrica will buy 1.75 million metric tons a year of liquefied natural gas from Cheniere Energy’s Sabine Pass plant in Louisiana, the Windsor, England-based company said Monday. That’s equivalent to the demand of 1.8 million U.K. homes. The deal can be extended for an additional 10 years, it said. Prices will be linked to Henry Hub, the U.S. gas benchmark, and deliveries will start in September 2018.
The deal shows the United States’ emergence as a natural-gas exporter after fracturing technology created a glut of fuel, sending prices to decade lows.
In contrast, U.K. gas prices spiked to a seven-year high last week after a fault on a Belgian pipeline, raising concern that Britain is vulnerable to supply shortages as indigenous production slumps.
— Bloomberg News
l Rengan Rajaratnam, the younger brother of imprisoned hedge fund manager Raj Rajaratnam, pleaded not guilty Monday to insider-trading charges. The younger Rajaratnam entered his plea in Manhattan federal court, one day after his arrest at John F. Kennedy International Airport in New York. Prosecutors on Thursday accused Rengan Rajaratnam, 42, of conspiring with his brother to trade on non-public information concerning Clearwire and Advanced Micro Devices in 2008.
l Best Buy founder Richard Schulze, who left the board last year and later failed in his effort to take the company private, will rejoin the retailer as chairman emeritus and add two of his former colleagues to the board.
l Shares of BlackBerry, the smartphone maker formerly known as Research in Motion, tumbled for a second straight day after Goldman Sachs cut its rating on the struggling company, citing a disappointing debut for its Z10 phone in the United States last week. The shares fell 4.6 percent, to $14.23, on Monday in New York, after a decline of 7.7 percent on Friday.
— From news services
l 8:30 a.m.: Durable-goods orders for February
l 10 a.m.: New-home sales for February
l Earnings: SAIC