Dear Valued Visitor,

We have noticed that you are using an ad blocker software.

Although advertisements on the web pages may degrade your experience, our business certainly depends on them and we can only keep providing you high-quality research based articles as long as we can display ads on our pages.

To view this article, you can disable your ad blocker and refresh this page or simply login.

We only allow registered users to use ad blockers. You can sign up for free by clicking here or you can login if you are already a member.

Citigroup Inc. (C): Facebook Inc. (FB) IPO Disaster Was NASDAQ’s Fault

Citigroup Inc. (NYSE:C), still stinging from its losses on underwriting the chaotic IPO of Facebook Inc. (NASDAQ:FB) in May, has fired off a 17-page letter to the Securities and Exchange Commission (SEC) blaming NASDAQ for the problems with the IPO, and recommending that NASDAQ restore all $20 million in losses rather than the “fraction” it has proposed.

Facebook Inc. (FB)

Citigroup Inc. (NYSE:C), UBS AG (NYSE:UBS) and Knight Capital were the primary underwriters for for the Facebook Inc. (NASDAQ:FB) IPO, and the three companies have claimed total losses in excess of $410 million. NASDAQ initially proposed to pay $40 million in compensation to the three firms for their mistakes, but have since upped that amount to $62 million – but Citigroup wrote the letter to the SEC saying it was not nearly enough. Citigroup lost about $20 million on the IPO, more than half of what Knight Capital lost and just 6 percent of the UBS AG (NYSE:UBS) loss.

“Nasdaq was grossly negligent in its handling of the Facebook I.P.O., and as such, Citi should be entitled to recover all of its losses attributable to Nasdaq’s gross negligence, not just a very small fraction as is currently the case,” Citigroup Inc. (NYSE:C) wrote in its letter to the SEC.

The letter from Citigroup Inc. (NYSE:C) went on to say that the losses from the IPO weren’t due to a system glitch as was cited by NASDAQ, but were “grossly negligent, self-serving business decisions.”

As might be expected, NASDAQ is claiming no such responsibility and denies the charges in the letter from Citigroup Inc. (NYSE:C). NASDAQ requires customers to sign a contract signifying agreement to the rules of the exchange before a stock begins trading.

How much Citigroup Inc. (NYSE:C) winds up getting out of this process may be small in nature, but it may send some kind of message to investors, especially hedge funds like David Tepper’s Appaloosa Management LP.

Biotech Stock Alert - 20% Guaranteed Return in One Year

Hedge Funds and Insiders Are Piling Into

One of 2015's best hedge funds and two insiders snapped up shares of this medical device stock recently. We believe its transformative and disruptive device will storm the $3+ billion market and help it achieve 500%-1000% gains in 3 years.

Get your FREE REPORT and the details of our 20% return guarantee today.

Subscribe me to Insider Monkey's Free Daily Newsletter
This is a FREE report from Insider Monkey. Credit Card is NOT required.
Loading Comments...

Thanks! An email with instructions is sent to !

Your email already exists in our database. Click here to go to your subscriptions

Insider Monkey returned 102% in 3 years!! Wondering How?

Download a complete edition of our newsletter for free!