The Nasdaq stock exchange 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 Monday before U.S. District Court Judge Robert Sweet, Nasdaq said it couldn’t be sued by consolidated class actions because of its legal status as a self-regulatory organization. As such an organization, Nasdaq argued, it cannot be sued for actions it took as part of its standard “regulatory functions.” To bolster its case, Nasdaq also argued that the claim of its negligence was not enough for the lawsuit to proceed. The judge has yet to rule on Nasdaq’s contention.
Bloomberg was first to report on this story.
The botched kickoff of the Facebook IPO last year pushed back the start of trading and ultimately created trading errors. Investors and traders who lost funds in the initial transaction sued Nasdaq, claiming it was negligent in its handling of the IPO.