The U.S. Securities Exchange Commission (SEC) has approved a plan to reimburse those market makers who a suffered loss in an initial public offering of Facebook Inc (NASDAQ:FB), which was botched on the NASDAQ Exchange.

NASDAQ OMX Group, Inc. (NASDAQ:NDAQ) created a plan and is offering a settlement worth $62 million to the brokerages that have gone through losses.

Facebook IPO

The initial public offering for Facebook Inc (NASDAQ:FB), which opened May 18, was delayed by half an hour due to a technical fault at NASDAQ OMX Group, Inc. (NASDAQ:NDAQ). After the glitches, the exchange decided to trade Facebook Inc (NASDAQ:FB) shares by using a secondary system, which was the reason for delays of many clients’ order and confirmation. Some investors and traders suffered big losses in the process. The share price declined after the initial shot up.

According to a source familiar with the case, the SEC examined NASDAQ’s Stock Market’s technology controls, which came under criticism after the failed IPO.

The SEC approved the NASDAQ’s rule change of paying more compensation than is permitted under existing bylaws. Due to NASDAQ’s technical glitch in handling the Facebook Inc (NASDAQ:FB) IPO, Four brokerages claimed that they have lost half billion dollars collectively. Considering the seriousness of the situation NASDAQ, which is a legally protected institution, agreed upon voluntary reimbursement of $62 million instead of a $3 million cap, which is the rule if any technical issue occurs.

Citigroup Inc advised the SEC not to approve the proposed plan of NASDAQ as it is the outcome of “high-risk, profit-oriented behavior,” and not actions that are part of its regulatory oversight.

Another institution, which claims that it lost more than $350 million in the botched Facebook Inc (NASDAQ:FB) IPO case, said that due compensation should be paid to the market makers. Knight Capital Group Inc, which lost all its money and stood on the verge of bankruptcy said that the SEC should approve the NASDAQ”S proposal.

The SEC stated that NASDAQ OMX Group, Inc. (NASDAQ:NDAQ) will reimburse the brokerages based on four categories of order, which will also include a category of order punched between 11:11 a.m. And 11:30 a.m. on May 18 and did not execute.

Those firms, which will receive compensation for their losses from NASDAQ, are required to release any claims against NASDAQ related to the IPO of Facebook Inc (NASDAQ:FB). According to the commentator, putting such condition before the compensation results into “fundamentally unfair dilemma.”

Additionally, the SEC said that NASDAQ OMX Group, Inc. (NASDAQ:NDAQ) will have to establish an objective and a fair method to award the claims.