UBS is sitting on big Facebook loses. Unconfirmed sources say its upwards of $350 million, ten times more than the estimates on the street. The market making arm of UBS is down $30 – $35 million, but UBS itself has not disclosed the full extent of these loses related to Facebook trading. The issue has to do with the failure to get confirmations and execution statements from the Facebook trades. UBS had put in for one million share allocation, but when they did not receive the confirmation, they repeated the order multiple times. All the clicks eventually went through and UBS ended up with more stock then they originally wanted. Sources say that UBS is preparing legal action against NASDAQ as a result. Whether NASDAQ will be held liable is debatable. Should UBS brokers have continued to click on the submit button, probably not. Some people are saying this is simply human error. At the end of the day, sources say that NASDAQ should have halted trading of Facebook stock when it was clear that confirmations were clearly not coming in on time. Apparently UBS tried to offload the stock at $35 per share but could not catch a bid, and sold some of their positions under $30 per share. Ed Butowsky, wealth manager, financial advisor, and managing partner of Chapwood Investment Management, joins CNBC Closing Bell to discuss the reality behind UBS’s claim to have lost potentially $350 million and how many other firms have realized the same impact of the trades or lack there of.
Ed Butowsky is the managing partner of Chapwood Investment Management and is an internationally recognized expert in the investment wealth management industry. Ed is also a frequent guest on other networks such as CNN, NBC, ABC, Fox News, Fox Business, and Bloomberg to name a few.