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FB Stock Confusion From NASDAQ rule 4626 form Could Have Caused Selling

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FB Stock NASDAQ Rule 4626

Did Facebook’s IPO get tainted with buying and selling that shouldn’t have happened? It sounds like a number of things went wrong in Wallstreet as stock traders, hedge fund managers and people betting on FB stock possibly got burned.

A hedge fund manager was so upset with the situation he revealed to Business Insider some of the issues he’s been running into. It was asked that the manager’s name be kept anonymous because he said, “I have a mortgage” and “I’m a blue collar Wall Street guy…I could lose my job if my partners found out I was talking to you.”

The first problem it seems that NASDAQ had was on opening day of the Facebook IPO. The system was somehow broken in that it was not delivering confirmed trades on buy and sells of the FB stock. While the weekend left traders scratching their heads wondering if their stock had actually sold or been purchased they got a surprise Monday morning.

In order to clear up the confusion NASDAQ started calling stock brokers about the Facebook stock issues. From the interview with the anonymous hedge fund manager with Business Insider it was said, “NASDAQ has a rule that says this is how we handle computer f–kups. NASDAQ rule 4626. It says if we f–kup we’ll pay it. They have a kitty of $3 million that they’ll payout.”

How was one supposed to get a piece of this $3 million backup fund in case NASDAQ had a computer problem? A form. The form caused the confusion that has apparently created lots of selling on Monday of Facebook stock. There was a 12:00pm lunch time deadline for the form to be filled out and submitted to NASDAQ in order to get money from their computer error fund.

The form applies to the NASDAQ rule 4626 and was pretty short and sweet. The form simply asked a trader how much they tried to sell NASDAQ:FB at and what they actually sold NASDAQ:FB at. Both parts of the form had to be filled out so traders took the que that in order to submit the form they need to sell the Facebook stock they were holding.

This apparently caused a rash of selling of Facebook stock and created downward pressure on the price which in turn caused more selling. NASDAQ isn’t answering press attempts to comment on the way the whole Facebook stock mess went down. It will probably be a few days before everyone knows whether NASDAQ will try and fix this or if stock traders get burned with major losses.

Facebook shares fall by 11% since Friday launch

Facebook IPO Dot Com Scam?

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0 Comments

  1. Eliott

    May 23, 2012 at 3:31 pm

    FB stock sunk bc of several reasons, the first being they diluted the stock, second being they over valued the company at 100 billion, and the third being they dont have much of a business model, , its a black box company that sells peoples vacation photos. Forth being the banks have shorted the stock from day 1. They essentially raised the stock price while increasing the shares and the market doesn’t work that way, I foresee this stock falling to around 10/share, once the speculation is cleared up.

  2. tony d

    May 23, 2012 at 12:17 pm

    didn”t mommy ever tell you dummies that the stock market is just like gambling in a casino .>> win 10% of the time but lose 88% and break even 2% which means its a losing battle period

    • Mike

      May 23, 2012 at 2:12 pm

      If I could rate your response to -5 for ignorance about the stock market works I would.

    • Luke

      May 23, 2012 at 7:56 pm

      Tony, the stock market is not a casino. Its impossible to never loose money, the worlds greatest investors have lost money in the stock market AND will loose money again in the future. Before you buy a stock, research the fundamentals and realize how much who are paying for it. Then calculate the risk and reward.

  3. MatthewLP

    May 23, 2012 at 11:01 am

    FB needs to fall below 30 to 29 IMO. and what it shold have been in the first place

  4. Howie Feltersnatch

    May 23, 2012 at 9:17 am

    Shenanigans. No way is Rule 4626 or anything other than the market reaction to an ill conceived IPO that is sending FB into the dumpster. $3 million is nothing in a 2 Billion share/$100 Billion offering. No one is going to sell at a loss to maybe get a tiny piece of that $3 million insurance. If FB had any real value then a single position alone would equal that $3 million. It would cover less an hour of regular trading activity of a regular day if that much. When it became apparent that retail investors were warned off by principals dumping and running and the horrible fundamentals it became only the underwriters making trades to support any value to the stock whatsoever. From today on you are likely to see shorts buying to cover their positions, but FB is in for quite a slide.

  5. Drew

    May 23, 2012 at 7:45 am

    LinkedIN EPS is 15 cents it opened at 45 now around 100. Facebook EPS 31 cents opened around 38-42. It will double maybe more in a couple of month’s. All this Neg. does not mean a thing. I am surrounded by peolple that did not like facebook and are now BUYING. Don’t buy if you can’t stomach this bad press that has nothing to do will value.

  6. Jorslinger & Associates

    May 23, 2012 at 6:47 am

    Only a fool would have bought any stock in facebook during the IPO. It’s stock was valued at over 100 times it’s “projected” earnings. That stock is not woth more than $5 a share in my opinion. Those with preferred stock made a bundle selling it to people caught up in the hype of the moment. I see facebook falling to $22 by this weekend.

  7. Bikehound

    May 23, 2012 at 5:12 am

    What happens when the $3mm runs out? I can’t help thinking the losses in that period will far exceed that amount.

  8. lol

    May 23, 2012 at 1:41 am

    You people are morons. ALL of you idiots bought this stock WAY overpriced and expected it to go to the MOON!

    It’s not 1999 anymore, the tech bubble is dead.

    I mean, come on, LOOK AT THE FINANCIALS! So much for your quick buck.

  9. Wilson Chen

    May 23, 2012 at 1:40 am

    EAT IT LOSERS!!! By back your stock? By back my b@lls! That’s what happens when you play the stock market like an idiot.

  10. JC

    May 22, 2012 at 11:02 pm

    facebook needs to buy back their stock at the price it was sold to the little guys…that’s the only fair thing to do.

    • CP

      May 23, 2012 at 12:58 am

      I completely agree with JC. It’s understood that Nasdaq f’d up, but this mess should be cleaned up the right way. In this market, these types of losses should not be taken lightly and if FB executives decided at the last minute to increase the shares offered which has also affected the price, then they should also take the responsibility of their F’up and buy back their shares at the price. Many of us have been burned by this and an 11% decrease on day 2 followed by a 9% decrease on day 3 is hard to ignore, especially when its your kids college savings funds that are now in jeopardy.

    • beaverusiv

      May 23, 2012 at 3:03 am

      Haha, whatever. If they have faith in the stock then let them ride it out, if they don’t then they’re idiots for buying. People make money when other people lose money.

    • Greg

      May 23, 2012 at 5:41 am

      Yeah, that’s not gonna happen.

    • Mike Jacobs

      May 23, 2012 at 6:22 am

      Why would Facebook pay for NASDAQ’s screw-up? They’re a victim here too; their stock is tumbling in part because the exchange fumbled the IPO, combined with Morgan Stanley’s revenue estimate downgrade which is now being investigated.

    • Jim

      May 23, 2012 at 8:17 am

      I am confused by your concept of fair. Buying a stock is an economic decision in which the value will either go up or go down. Just because someone is stupid enough to think that a facebook IPO would be their pathway to instant riches, does not mean that Facebook owes them a cent. The fact that the Facebook IPO tanked is economic Darwinism at its finest.

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2.2 Million More Patient-Victims Of AMCA Data Breach Came Forward

Clinical Pathology Laboratories blamed AMCA for not providing them enough information back in June.

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Photo: Thirteen Of Clubs Follow | Flickr | CC BY-SA 2.0

A month after the medical collection portal owned by the American Medical Collection Agency (AMCA) fell victim to a data breach that has affected more than 20 million of their users from different blood testing laboratories and medical institutions around the country, a new AMCA partner lab came forward and said that their clients were also affected by the data breach.

According to Clinical Pathology Laboratories (CPL), 2.2 million clients may have had their names, addresses, phone numbers, dates of birth, dates of service, balance information, and treatment provider information stolen from the previously reported data breach involving AMCA.

Last month, data were stolen from users of the AMCA payment portal that was used to pay for laboratory fees by more than 20 million victims. These data include their names, phone numbers, dates of birth, home addresses, social security numbers, credit card numbers, and other bank details.

The list of impacted testing laboratories includes Quest Diagnostics (11.9 million patients), LabCorp (7.7 million patients), BioReference Laboratories (Opko Health subsidiary, 422,600 patients), Carecentrix (500,000 patients), and Sunrise Laboratories (undisclosed number of patients).

This time, Clinical Pathology Laboratories (CPL) says that an additional 2.2 million victims of the data breach come from their client list, and another 34,500 patients had their credit card or banking information compromised.

The company blamed the late announcement from CPL to AMCA for not providing them with enough information regarding the breach when it was first disclosed in June.

“At the time of AMCA’s initial notification, AMCA did not provide CPL with enough information for CPL to identify potentially affected patients or confirm the nature of patient information potentially involved in the incident, and CPL’s investigation is on-going,” said the company in a statement.

As of today, it is still unclear whether AMCA nor its partner companies have reached out to their clients to personally notify them about the data breach. Back in June, AMCA first disclosed that only 200,000 clients had their data compromised. However, reports from its partners have confirmed that the victim tally reaches 20 million.

AMCA and partners were slapped with lawsuits

AMCA, Quest, and LabCorp in June were slapped with at least 19 lawsuits concerning the data leak. More than 19 class-suite actions have been filed against the three companies for their involvement in the breach and their inability to fulfill the promise of protecting their clients’ sensitive information.

According to one of the lawyers in one of the lawsuits hurdled against the involved companies, healthcare providers are one of the most susceptible entities, but they have lackluster data protection systems.

“Healthcare companies are especially susceptible to data breaches not only because they aggregate a tremendous amount of important and sensitive data, but also because they tend to be less focused on cybersecurity protection than other industries,” said John Yanchunis of Morgan and Morgan, one of the firms who filed lawsuits against Quest Diagnostics.

Yanchunis said that these companies “know [that] they are at an increased risk and yet have not taken the proper steps to protect their patients’ data.”

AMCA filed for bankruptcy

Amid the data breach that centers the American Medical Collection Agency, the company has filed for bankruptcy and laid off more than 70% of its workforce, as cost in mitigating the impacts of the leak has to lead the company to lose a massive amount of money.

According to the company, the data breach “resulted in enormous expenses that were beyond the ability of the Debtor to bear.”

“Almost immediately upon learning of the breach, LabCorp unqualifiedly and indefinitely terminated its relationship with the Debtor,” the filing reads.

“Soon after, Quest Diagnostics, Conduent, Inc., and CareCentrix, Inc. which together with LabCorp were the Debtor’s four largest clients, stopped sending new work to the Debtor, and all terminated or substantially curtailed their business relationships with the Debtor.”

Cybersecurity experts have estimated that the company most likely to spend at least $400,000 for cyber forensics alone. Add to that the cost of IT support, severe restrictions that were put in place to protect AMCA’s network from further intrusion, looming court cases, and the loss of valuable business partners; it is most likely that the company was driven to the abyss of bankruptcy by the data breach.

Of course, to cut cost, AMCA has also laid off employees and only retained those who are significant in the legal battles it faces, including the lawsuits and its request for bankruptcy. AMCA’s current employee count is down from 113 to 25, which practically cut of 78% of its human resources. Fuchs has asked the court to consider a motion which will ensure the firm’s remaining staff will be paid during the process.

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Treasury Chief Says Crypto Is A “National Security Risk”

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Secretary of the Treasury Steven Mnuchin | 7/25/17 (Official White House Photo by Ricky Harris)

A new jab was thrown against Bitcoin and cryptocurrencies from the US government after statements from the U.S. Treasury Secretary branded the industry as a “national security threat.”

Facebook’s announcement of Libra has brought crypto and blockchain technology in the center stage, as governments around the world have heightened their scrutiny on the alternative financial system that the industry is offering.

Government executives and high ranking officials have raised concerns on the volatility of the technology, and how it is being used by malicious actors to facilitate illegal transactions such as money laundering and illegal drugs.

Now, US Treasury Secretary Steven Mnuchin chimed in the conversation and echoed earlier apprehensions versus Bitcoin and cryptocurrencies. The Secretary warns that Bitcoin, as well as, Facebook’s plans for Libra, pose a “national security issue” for the United States.

“This is indeed a national security issue,” Mnuchin told reporters at a press conference yesterday. “Cryptocurrencies such as bitcoin have been exploited to support billions of dollars of illicit activity like cyber crime, tax evasion, extortion, ransomware, illicit drugs, and human trafficking,” adding that Facebook’s Libra “could be misused by money launderers and terrorist financiers.”

Mnuchin echoed other politicians stance on Facebook’s Libra venture and said that he was “not comfortable” by the idea of it.

Trump vs. Crypto

In a series of tweets on last week, the POTUS said that he is not a “fan” of cryptocurrencies, asserted that America has only one currency, criticized bitcoin, as well as told Facebook that they need a banking charter if they want to launch their newly announced crypto-based money called Libra.

Trump said cryptocurrencies are not money, and “Unregulated Crypto Assets can facilitate unlawful behavior, including drug trade and other illegal activity.”

“If Facebook and other companies want to become a bank, they must seek a new Banking Charter and become subject to all Banking Regulations,” said the president.

Related: Trump Vs. Crypto: Dollar Is The Only Currency Of The USA

According to the President, the dollar is the only currency in America, and Libra, among other cryptocurrencies, are not “real money.”

“We have only one real currency in the USA, and it is stronger than ever, both dependable and reliable. It is by far the most dominant currency anywhere in the World, and it will always stay that way. It is called the United States Dollar!” Trump said in a tweet.

Trump’s anti-crypto stand was agreed upon by Mnuchin saying that “the president does have concerns as it relates to bitcoin and cryptocurrencies—those are legitimate concerns that we have been working on for a long period of time.”

Democrats vs. Crypto

Joining Trump’s army against cryptocurrencies and Facebook’s Libra plans are Democrats from the Senate who recently circulated a draft proposal that bans big tech companies from issuing digital money.

The bill, which was bluntly named as “Keep Big Tech Out Of Finance Act,” circulates among Democrats majority that leads the U.S. House Financial Services Committee, proves that the US government is not joking about its position against Libra and other similar ventures in the future.

Read More: Democrats Move To Ban Big Techs From Issuing Digital Money

According to the proposed bill, no tech company should be allowed to issue any form of financial services. “A large platform utility may not establish, maintain, or operate a digital asset that is intended to be widely used as a medium of exchange, unit of account, store of value, or any other similar function, as defined by the Board of Governors of the Federal Reserve System,” reads a copy of the bill obtained by Z6Mag.

Furthermore, while the bill does not specify any company, it clearly refers to Facebook, and it’s planned blockchain-based currency, Libra. The “large platform utility” is defined as a technology company with “[an] annual global revenue of $25,000,000,000 or more” and one that is “predominately engaged in the business of offering to the public an online marketplace, an exchange, or a platform for connecting third parties.” This definition seems to be crafted to include Facebook rather than exclude other companies.

It is also worth noting that the proposed legislation also prohibits “large platform utilities” from affiliation with “persons who are a financial institution.” This further includes Facebook’s proactive workaround against possible future laws that may prohibit them from owning Libra.

Nonetheless, the bill is still in its earliest phase yet, and many could happen to move forward. For it to become a law, it still has to withstand the possible opposition by Republicans in both the House and the Senate.

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Senator To Facebook’s Libra: ‘Can People Trust You?’

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Photo: BTC Keychain | Flickr | CC BY 2.0

When it comes to Facebook’s Libra, the US government has made one thing clear: they don’t trust the tech giant and its plan to release an alternative financial system based on the highly debated blockchain technology.

In a Senate hearing today, a Facebook executive was grilled by lawmakers in the Senate Banking Committee over the plan to issue its digital currency and its possible effect on the global banking and financial ecosystem.

Facebook announced a month ago that it would roll out a new form of digital money, called Libra, which the tech superpower claims to be a stable coin. Unlike its predecessor, Bitcoin, the Silicon Valley giant claims that Libra is a cryptocurrency backed by real-world money and government certificates, and is also supported by a group of corporations such as Mastercard, Paypal, and VISA.

Libra is set to be available for circulation early next year, but a few weeks following Facebook’s announcement, staunch government opposition has proved difficult for Libra to push through with its most ambitious plan.

“Facebook has said ‘just trust us’” Senator Sherrod Brown, Democrat of Ohio, said at the hearing. “And every time Americans trust you, they seem to get burned.”

Many governments around the world have echoed concerns on how Facebook will handle such an ambitious feat. Many claims that because of the company’s reputation in data security, it is hard to trust Facebook in handling people’s money.

“Trust is primordial”

“Do you really think people should trust Facebook with their hard-earned money?” Senator Brown asked Facebook’s exec, David Marcus.

As a response, Marcus said that the company would do its best to protect people’s money, as well as, prevent fraud and other illegal activities that malicious actors may carry out using Facebook’s Libra.

One of the significant critiques against Facebook’s digital money comes from the fact that cryptocurrencies are not well regulated and criminal element can leverage the technology and use Libra for money laundering and other forms of illegal payments.

“We’ve made mistakes in the past,” Mr. Marcus said. “We have been working, and are working hard to get better.”

“Trust is primordial,” he added.

Keep Big Tech Out Of Finance Act

The Senate hearing comes a day after a copy of a draft proposal in the Senate penned by Democrat senators surfaced that practically bans major tech companies from issuing digital currencies.

Read: [Breaking] Democrats Move To Ban Big Techs From Issuing Digital Money

A new draft proposal for the bill, bluntly named as “Keep Big Tech Out Of Finance Act,” that circulates among Democrats majority that leads the U.S. House Financial Services Committee, proves that the US government is serious about its position against Libra and other similar ventures in the future.

According to the proposed bill, no tech company should be allowed to issue any form of financial services. “A large platform utility may not establish, maintain, or operate a digital asset that is intended to be widely used as a medium of exchange, unit of account, store of value, or any other similar function, as defined by the Board of Governors of the Federal Reserve System,” reads a copy of the bill obtained by Z6Mag.

Global fiscal and legislative resistance vs. Libra

Furthermore, while the bill does not specify any company, it clearly refers to Facebook, and it’s planned blockchain-based currency, Libra. The “large platform utility” is defined as a technology company with “[an] annual global revenue of $25,000,000,000 or more” and one that is “predominately engaged in the business of offering to the public an online marketplace, an exchange, or a platform for connecting third parties.” This definition seems to be crafted to include Facebook rather than exclude other companies.

It is also worth noting that the proposed legislation also prohibits “large platform utilities” from affiliation with “persons who are a financial institution.” This further includes Facebook’s proactive workaround against possible future laws that may prohibit them from owning Libra.

European officials have also expressed concern regarding Libra, citing that the system, if widely adopted, could shake the global economy and rival national banks. French Finance Minister Bruno Le Maire sent a letter to officials from the G7 and International Monetary Fund calling for a group to examine Libra’s impact on the global financial system. Le Maire said that Libra must not become a “sovereign currency,” while a German politician noted Facebook’s potential to become a “shadow bank” to the global financial system.

Aside from European officials, Japanese lawmakers are also investigating the possible impact of Facebook’s Libra in global banking and financial systems ahead of the G-7 Meeting of the country’s finance ministry to be held in France this week.

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