Nasdaq agrees to record $10m fine over Facebook float fiasco

NASDAQ has agreed to pay a record fine of $10m (£6.6m) over its botched handling of Facebook’s initial public offering (IPO).

The sum, paid to the US Securities and Exchange Commission (SEC) is the most a stock exchange has ever paid out in compensation, even requiring the SEC to up the maximum fine it can levy on an exchange.

Facebook’s IPO in May last year was fraught with technical difficulties, meaning some trades were stuck in the system for hours on the first day of trading. Investors who lost an estimated $500m on the day of the IPO are seeking a separate payout from Nasdaq, which has offered up to $62m, still less than demanded.

Meanwhile, Facebook yesterday gave in to pressure to tighten the way it polices controversial content after a backlash from campaign groups saw advertisers pull their business from the social network.

An outcry from campaigners who had demanded that Facebook regulate content more strictly had embarrassed firms that saw their adverts juxtaposed with the content, leading the likes of Nissan and Nationwide to suspend their ties with Facebook.

Facebook ads are automatically targeted based on a number of user demographics, rather than being deliberately placed next to certain types of material. However, a social media campaign targeted at the companies forced them to withdraw their adverts.

Nissan said it had resumed advertising, although Nationwide continues to suspend ads.