Facebook has finally accepted the reason behind the disaster that occurred at the IPO day and its consequences after its debut at lackluster stock market yesterday. However, for the occurrence of this incidence, Facebook has pointed the finger of blame directly towards Nasdaq, holding it solely responsible. In a recent released court motion, while Nasdaq is being sued by numerous investors, Facebook has come forward to claim the malfunctioning of Nasdaq’s software to be the reason behind the chaotic situation at the IPO.

The technical fault that arose because of Nasdaq caused a delay of almost 30 minutes in trade transactions on May 18th. A lot of traders faced problems with the cancellation of orders and while conducting their trade. Sources also state that the Nasdaq has to face six serious class action cases for creating a situation of uncertainty and being the reason for so many losses that were incurred to the investors.

The motion went on to state that, “as has been widely reported in the press, the commencement of trading in Facebook shares was delayed as a result of problems with Nasdaq’s software systems, which impaired the orderly execution of trades and price levels.” The IPO debut that Facebook had planned could not come up to the expectations which had been made in anticipation of the debut. The incident that occurred on May 18th caused much disappointment to the company. The huge amount of loss faced by the investors leads to a great deal of anxiety to them.

It was acknowledged that the issues on part of Nasdaq created a state of distress for all the shareholders, as Facebook said, “investors suddenly were turning against Facebook as a direct result of the technical difficulties.” Nasdaq, however, did come forward to admit that the IPO disaster was a cause of the technical shortcomings of their software. They made a public apology for the inconvenience caused. This, however, was taken negatively by Facebook, since these statements made by Nasdaq have further damaged Facebook’s image and reputation in the stock market. Therefore, its chances of survival and competitiveness in the stock market have been put to a questionable stance. The motion also stated, “Commentators have stated that Nasdaq’s announcement caused a rash of stock sales that again drove down the price of Facebook shares.”

The New York Times also reported that the benefactors of Facebook, including J.P. Morgan, Stanley and Goldman Sachs, faced many problems in order to settle things with the numerous shareholders that were holding lawsuit charges against the network. The social network has passed on a request for all the lawsuits and proceedings to be held in the Southern District in New York. Willkie Farr &Gallagher LLP along with Kirkland &Ellis LLP are the lawfirms representing Facebook.

The reports released by the motion state that the investors and shareholders of Facebook are suing the social network along with its directors and underwriters so that they can “challenge certain disclosures in advance of Facebook’s IPO.” They have also suggested that Facebook did not truthfully inform the possible risks that came along with the investments in the huge social network. In its defense, Facebook says that they did inform all the investors about how things would change and the stock market would react if something did go wrong.