Nasdaq Stock Market Inc. has been ordered to pay more than $6,000 to two independent traders who complained of losses resulting from Nasdaq’s handling of erratic trading in Corinthian Colleges Inc.
The New York traders were each awarded a $3,000 judgment and $42.50 in other costs last week in a Manhattan small claims court, people involved with the case said.
No representatives from Nasdaq or parent National Association of Securities Dealers, the entity named in the claim, attended the inquest, according to a court official, the traders and the arbitrator who oversaw the case.
Nasdaq can still submit a motion to overturn the judgment, but hadn’t as of Friday, court supervisor Jim Lopez said.
A spokeswoman for Nasdaq, Sylvia Davi, said Nasdaq doesn’t comment on lawsuits, as a matter of policy.
The award sum may seem small for Nasdaq, but a number of other market participants are also seeking damages via lawsuits, and some have said they lost much more in the Dec. 5 trading incident. One hedge-fund official, for example, said he suffered “high seven-digit losses.”
The traders, Bobby Weiss and Mitchell Kupfer, said they lost about $4,800 and $1,500 respectively in the Dec. 5 mishap. But they also complained of losing out on thousands more in potential profits.
The problem arose when shares of Corinthian, a Santa Ana, Calif., post-secondary education company, suddenly plunged the morning of Dec. 5. The wild activity wasn’t caused by the company, but was apparently triggered by an erroneous order.
Nasdaq then halted buying and selling, and belatedly took the unusual step of canceling hundreds of trades. Some peeved market participants complained that the circumstances of the halt and decision to cancel transactions weren’t properly communicated by Nasdaq, causing them to lose money.
