Typically our nominees here at BuyersStrike! for Bad Director awards are not from larger cap household names, but there is a first time for everything. Today’s amazingly shameful blunder by the Board of the Nasdaq OMX Group (NDAQ) wins them all nominations for Bad Directors.
To recap, in a press release issued at 1pm in New York today, the Nasdaq OMX Group discussed creating a $40mm fund to help member firms recoup some of their Facebook (FB) losses:
the NASDAQ OMX Group Board approved a voluntary accommodations fund of approximately $40 million. Under the proposal, the details of which are subject to SEC review, approximately $13.7 million would be paid in cash to member firms. The balance would be credited to members to reduce trading costs, with all benefits expected to be achieved within six months for the vast majority of firms.
This is just the latest example of how the NASDAQ functions more for the benefit of its member firms and listing firms than it does for its own public shareholders and investors, both small and large, in its listed companies.
$40mm that belongs to the current public shareholders is being given to the former shareholders (the “member firms“).
Why should the losses of sophisticated member firms be borne by the public shareholders to whom the board of the Nasdaq OMX Group owe a fiduciary duty? Why should the losses of these sophisticated firms be ameliorated while far less sophisticated FB investors have to bear the full weight of theirs?
Shouldn’t anyone and everyone foolish enough to play the Facebook IPO game be forced to face their own consequences?
And so, we humbly nominate the following as Bad Directors:
Hans Munk Nielson
Steven D. Black
John D. Markese
Michael R. Splinter
Ellyn A McColgan
Glenn H Hutchins
Thomas F O’Neill
Deborah L Wince-Smith
Essa Abdel Fattah Kazim
Congratulations folks, you are redefining Moral Hazard for the Facebook Generation.