Reuters: Regulatory News: Direct Edge to contest Nasdaq plan to aid Facebook clients

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Direct Edge to contest Nasdaq plan to aid Facebook clients Jun 7th 2012, 14:11 Thu Jun 7, 2012 10:11am EDT NEW YORK, June 7 (Reuters) - Bill O'Brien, chief executive of exchange operator Direct Edge, on Thursday called Nasdaq OMX's plans to compensate clients for its mishandling of Facebook's initial public offering an illegal move and a challenge to the industry. "It was a shameless attempt to basically turn an investor confidence-eroding event into a competitive advantage," O'Brien told analysts at a Sandler O'Neill conference on exchanges and brokerage. "We're going to vigorously contest it." O'Brien said he does not believe Nasdaq's plans will be approved by the Securities and Exchange Commission, and he said Nasdaq will have to go back to the drawing board to address how it will compensate clients. Nasdaq OMX Group Inc said it will offer $40 million in cash and rebates to clients harmed by its mishandling of Facebook Inc's market debut.

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