The organization argues that it cannot be sued by the class-action because of its legal status as a self-regulatory organization. (Credit: Sarah Tew/CNET) Nasdaq has requested that a U.S. District Court judge in Manhattan throw out a group of class-action lawsuits charging the organization with violation of securities laws on the Facebook IPO. In a brief filed before U.S. District Court Judge Robert Sweet, Nasdaq said that it couldn't be sued by consolidated class actions because of its legal status as a self-regulatory organization. As such an organization, Nasdaq cannot be sued for actions it took as part of its standard "regulatory functions." To bolster its case, Nasdaq also argued before the court that the claim of its negligence was not enough for the lawsuit to proceed. The court has yet to rule on Nasdaq's contention. Related stories SEC fines Nasdaq $10M over Facebook IPO Dell CEO said to mull Blackstone buyout only with CEO assurance Nasdaq gets OK to pay out $62M for botched Facebook IPO Facebook served new lawsuit over bungled IPO Nasdaq said to be settling with SEC over Facebook's IPO flop Bloomberg was first to report on this story. After the botched Facebook IPO last year that pushed trading back and ultimately caused trading errors, investors and traders who lost funds in the initial transaction sued Nasdaq, claiming it was negligent in its handling of the IPO. For its part, Nasdaq has not said that it was negligent. Earlier this year, the organization paid out millions to settle claims brought against it by the Securities and Exchange Commission over the regulatory body's charges that Nasdaq had "poor systems and decision-making" on the day of the IPO. The SEC did not, however, force Nasdaq to admit wrongdoing or negligence. Still, Nasdaq has tried to express regret over the botched IPO. After the IPO, Nasdaq said that it was "humbly embarrassed" by the trading troubles on that day, adding it was "not our finest hour."
The organization argues that it cannot be sued by the class-action because of its legal status as a self-regulatory organization.
Nasdaq has requested that a U.S. District Court judge in Manhattan throw out a group of class-action lawsuits charging the organization with violation of securities laws on the Facebook IPO.
In a brief filed before U.S. District Court Judge Robert Sweet, Nasdaq said that it couldn't be sued by consolidated class actions because of its legal status as a self-regulatory organization. As such an organization, Nasdaq cannot be sued for actions it took as part of its standard "regulatory functions." To bolster its case, Nasdaq also argued before the court that the claim of its negligence was not enough for the lawsuit to proceed. The court has yet to rule on Nasdaq's contention.
Related stories
- SEC fines Nasdaq $10M over Facebook IPO
- Dell CEO said to mull Blackstone buyout only with CEO assurance
- Nasdaq gets OK to pay out $62M for botched Facebook IPO
- Facebook served new lawsuit over bungled IPO
- Nasdaq said to be settling with SEC over Facebook's IPO flop
Bloomberg was first to report on this story.
After the botched Facebook IPO last year that pushed trading back and ultimately caused trading errors, investors and traders who lost funds in the initial transaction sued Nasdaq, claiming it was negligent in its handling of the IPO.
For its part, Nasdaq has not said that it was negligent. Earlier this year, the organization paid out millions to settle claims brought against it by the Securities and Exchange Commission over the regulatory body's charges that Nasdaq had "poor systems and decision-making" on the day of the IPO. The SEC did not, however, force Nasdaq to admit wrongdoing or negligence.
Still, Nasdaq has tried to express regret over the botched IPO. After the IPO, Nasdaq said that it was "humbly embarrassed" by the trading troubles on that day, adding it was "not our finest hour."
