UBS Confirms $356M Loss on Facebook (FB), Orders Entered Multiple Times
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UBS AG (NYSE: UBS) confirmed earlier reports that the bank lost $356 million on mishandling of the Facebook (Nasdaq: FB) IPO. The story broke last month, and at the time many investors had a hard time imagining how the bank’s losses could be so large.
According to a statement release by the bank, “As a result of system protocols that we had designed to ensure our clients' orders were filled consistent with regulatory guidelines and our own standards, orders were entered multiple times before the necessary confirmations from NASDAQ were received and our systems were able to process them. NASDAQ ultimately filled all of these orders, exposing UBS to far more shares than our clients had ordered.”
While most agree with UBS that the losses were a result of “gross mishandling” by Nasdaq, many question the intelligence of UBS’s systems. The UBS loss is much larger than the $62 million Nasdaq set aside to compensate its clients for their loss, a number Nasdaq claims is fair.
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According to a statement release by the bank, “As a result of system protocols that we had designed to ensure our clients' orders were filled consistent with regulatory guidelines and our own standards, orders were entered multiple times before the necessary confirmations from NASDAQ were received and our systems were able to process them. NASDAQ ultimately filled all of these orders, exposing UBS to far more shares than our clients had ordered.”
While most agree with UBS that the losses were a result of “gross mishandling” by Nasdaq, many question the intelligence of UBS’s systems. The UBS loss is much larger than the $62 million Nasdaq set aside to compensate its clients for their loss, a number Nasdaq claims is fair.
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