Morgan Stanley is prepared to take Nasdaq to court to recoup money it believes it lost in the flubbed Facebook initial public offering.
CEO James Gorman’s investment bank, which led the now-notorious, snafu-ridden Facebook IPO, believes Bob Greifeld’s Nasdaq owes it roughly $10 million, sources said.
The investment bank, which quarterbacked the $16 billion Facebook offering, had to shell out to clients a seven-figure sum to resolve a litany of Nasdaq trading glitches.
The blockbuster offering, which helped Facebook sell more than 400 million shares at $38 apiece — many to Main Street investors — has turned into a sore subject rather than source of pride for the white-shoe bank.
Indeed, during an internal talk at Morgan Stanley’s headquarters on May 29, Gorman blamed solely Nasdaq for the snags on May 18 that created “unprecedented confusion and disarray.”
The Morgan Stanley chief also said reports suggesting that the Wall Street bank’s handling of the early marketing of the offering was “nefarious” were “100 percent untrue.”
Gorman also noted that he received a call from Facebook COO Sheryl Sandberg, praising Morgan Stanley’s handling of the IPO.
Meanwhile, praise isn’t what Nasdaq’s Greifeld has been enjoying.
So far, a laundry list of market participants — including Citadel, UBS, Citigroup and Knight Capital — are among those waiting to collect as much as $180 million from the exchange in the wake of the Facebook flub.
However, since talking to some parties during a conference call about Facebook trades last week, Nasdaq has gone “radio silent,” sources said.