Nasdaq has agreed to pay the government a $10-million penalty to settle federal civil charges after regulators said its systems and decisions disrupted Facebook's public stock offering last year.
The Securities and Exchange Commission said Wednesday that the penalty is the largest ever imposed against an exchange. Nasdaq also has had to pay $62 million in reimbursements to investment firms that lost money because of the problems.
Facebook launched its initial public offering on May 18, 2012, amid great fanfare. But computer glitches at Nasdaq delayed the start of trading and threw the launch into chaos.
The technical problems kept many investors from buying shares that morning, selling them later in the day or even knowing whether their orders went through. Some said they were left holding shares they didn't want.
The SEC says a design flaw in Nasdaq's systems was to blame and Nasdaq officials then made a series of "ill-fated decisions." Nasdaq neither admitted nor denied wrongdoing.
The Facebook IPO was one of the largest in history. The social network was valued at more than $100 billion when it went public for $38 a share. Its shares closed Wednesday at $23.32, down 78 cents.
Nasdaq violated market rules by being poorly prepared, the SEC said. Exchanges have an obligation to ensure that their systems and contingency plans are strong enough to manage an IPO without disrupting the market.