Reuters: Regulatory News: UPDATE 1-Direct Edge to contest Nasdaq plan to aid Facebook clients

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UPDATE 1-Direct Edge to contest Nasdaq plan to aid Facebook clients Jun 7th 2012, 14:30 Tweet Share this Email Print Related Topics Stocks » Regulatory News » Markets » Financials » Industrials » Technology » Thu Jun 7, 2012 10:30am EDT By Herbert Lash 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. "I don't think it complies with U.S. securities law," O'Brien said. "It's like dumping oil in the ocean. You can't do it." 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. Related Quotes and News Company Price Related News Tweet this Link this Share this Digg this Email Reprints We welcome comments that advance the story through relevant opinion, anecdotes, links and data. If you see a comment that you believe is irrelevant or inappropriate, you can flag it to our editors by using the report abuse links. Views expressed in the comments do not represent those of Reuters. For more information on our comment policy, see http://blogs.reuters.com/fulldisclosure/2010/09/27/toward-a-more-thoughtful-conversation-on-stories/ Comments (0) Be the first to comment on reuters.com. Add yours using the box above.

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