United States District Judge Sweet has rejected Nasdaq OMX Group Inc's bid to dismiss lawsuits by investors who accused the exchange operator of botching Facebook Inc's $16 billion initial public offering. Nasdaq had argued that its status as a self-regulatory organization (SRO) gave it immunity from claims it broke securities laws and was negligent in how it executed orders to buy and sell shares of the social media company on May 18, 2012, the first day of trading.
According to Reuters, while Judge Sweet agreed that Nasdaq immunity from some claims, including the decision not to halt the IPO. he rejected Nasdaq's effort to dismiss claims over the design and testing of its systems, including that it allegedly knew its advertised "on-time, on-target and ready-to-launch" had not undergone the "stress tests" needed to ensure it was up to handling trading in Facebook. Sweet said the plaintiffs adequately alleged that Nasdaq's inadequate disclosures caused them to lose money through failed trade executions and possible "artificial downward pressure" on Facebook's share price.
For more information - Nasdaq fails to win dismissal of Facebook IPO lawsuit | Reuters
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