The US Securities and Exchange Commission (SEC) is mulling over ordering the Nasdaq to upgrade its computer systems following the Facebook fiasco.
An investigation has found that the Nasdaq is riddled with computer problems which led to a delay of 30 minutes on share trades being processed.
It all comes down to a pre-IPO auction process that the exchange installed in 2006 that allows traders to place orders and agree on an IPO price before the stock is officially launched. This sub-routine had a stress attack and broke.
A number of brokerages suffered financial losses after losing out on half an hour of trading and not receiving up-to-date information about Facebook.
Nasdaq has asked IBM to conduct a review of the current state of processes for designing, developing, testing, deploying and operating market systems.
But Computerworld has reported that the SEC may now order Nasdaq to revamp its processes for developing, changing, testing and running the computer code used in IPOs before that report comes out.