May 30, 2013 in Business

Nasdaq to pay for disruption

From Wire Reports
 

WASHINGTON – Nasdaq has agreed to pay a $10 million penalty to settle federal civil charges after regulators said its systems and decisions disrupted Facebook’s public stock offering last year.

The Securities and Exchange Commission said Wednesday that the penalty is the largest ever imposed against an exchange. Nasdaq also has had to pay $62 million in reimbursements to investment firms that lost money because of the problems.

Facebook launched its initial public offering on May 18, 2012 amid great fanfare. But computer glitches at Nasdaq delayed the start of trading and threw the launch into chaos. The technical problems kept many investors from buying shares that morning, selling them later in the day or even knowing whether their orders went through. Some said they were left holding shares they didn’t want.

The SEC says a design flaw in Nasdaq’s systems was to blame and Nasdaq officials then made a series of “ill-fated decisions.”

Nasdaq neither admitted nor denied wrongdoing.

On Wednesday, Facebook shares fell 78 cents, or 3.2 percent, to close at $23.32

Motorola opens Texas factory

AUSTIN, Texas – Cellphone pioneer Motorola is opening a Texas manufacturing facility that will create 2,000 new jobs and produce the first smartphone ever assembled in the U.S.

Motorola Mobility announced late Wednesday it will produce its new flagship device, Moto X, in Fort Worth.

The factory will be owned and run by Flextronics International Ltd., a Singapore-based contract electronics manufacturer that has had a long relationship with Motorola.

Motorola spokesman Will Moss said the Fort Worth location was once occupied by Nokia and is ideal because it was already designed for mobile device production. Motorola is owned by Google.

Banks report record earnings

WASHINGTON – U.S. banks earned more from January through March than during any quarter on record, buoyed by greater income from fees and fewer losses from bad loans.

The Federal Deposit Insurance Corp. says the banking industry earned $40.3 billion in the first quarter, up 15.8 percent from the $34.8 billion earned in the first quarter of 2012.

Despite record earnings, the report sketched a mixed picture for an industry that is still finding its way five years after the peak of the 2008 financial crisis.

Only about half of U.S. banks reported improved earnings from a year earlier, the lowest proportion since 2009. Bank lending declined after several quarters of increases. And bank profits from interest charged fell to the lowest level in nearly seven years.

Imports ease drug shortage

WASHINGTON – Federal health regulators will allow overseas imports of a critical intravenous drug formula used to nourish premature infants, amid a shortage that has impacted hospitals nationwide.

The Food and Drug Administration says new supplies of the injectable drug, total parenteral nutrition, will be available to U.S. patients this week. The agency is temporarily allowing imports from a plant in Norway to ease shortages triggered by the shutdown of American Regent, the drug’s primary U.S. manufacturer.

American Regent halted operations late last year to fix contamination issues uncovered by FDA inspectors. Regulators found a number of problems at the company’s facility, including specs of matter floating in injectable drugs.

Hospitals across the U.S. use parenteral nutrition formula to feed infants who are unable to eat or drink.

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