US broker Knight Capital has backed an improved compensation pot of $62m (£39.2m) from the Nasdaq stock exchange over losses incurred after the botched Facebook float in May, it was revealed yesterday.
The broker was threatening to sue Nasdaq over the errors, which caused market makers like Knight to lose millions after a glitch meant investors were unable to see whether or not they had bought Facebook shares.
Nasdaq had attempted to woo Knight and others with a $40m compensation fund. The firm originally baulked at the amount. It now says it will accept the improved $62m offer.
Knight – which nearly went bankrupt last month following its own trading glitch, and was only saved from an emergency capital injection from investors – wrote to the US Securities and Exchange Commission on Wednesday backing Nasdaq’s proposal.
The move is in sharp contrast to Citigroup, which also lost cash on the Facebook float. It wrote to the SEC last week dismissing Nasdaq’s offer.