Appeals Court Nixes Arbitration For UBS, Nasdaq In Facebook IPO Case

UBS cannot force Nasdaq to arbitrate its claims of “catastrophic mismanagement” of the 2012 Facebook IPO, a divided appeals court ruled. UBS seeks to recoup its more than $350 million in losses from the technologically challenged IPO, which saw a delayed opening and two hours of trading lost in the morass of Nasdaq’s jammed system. In its March 2013 arbitration demand, UBS claimed Nasdaq was “grossly negligent” in allowing shares to trade despite not having a system “up to the task” of handling such a major IPO. The appeals court ruling enforces a June 2013 ruling by U.S. District Judge Robert Sweet barring arbitration.