$10 Million Gitch: Record SEC Fine Highlights Critical Role of Technology

The fallout from last year’s botched Facebook IPO continues. Nasdaq was recently fined a whopping $10 million by the SEC due to systems failings—the largest ever imposed against an exchange. The culprit: Nasdaq’s kludgy technology, which relied on systems that weren’t up to handling the massive trading volume.  More than 30,000 Facebook orders were stuck in Nasdaq’s system for more than two hours, when they should have been immediately executed or canceled. And it wasn’t a mere technical glitch that caused a backup in orders, but an overall flaw in the system’s design was at the root of the problem.