Nasdaq to settle Facebook IPO lawsuit for $26.5 million

In a first for a U.S. stock exchange, Nasdaq OMX Group on Thursday agreed to pay $26.5 million to settle a class-action lawsuit involving its bungling of Facebook Inc's $16 billion initial public offering, the plaintiffs' lawyers said. The lawsuit said Nasdaq violated federal and state laws by not disclosing technology weaknesses in its IPO systems and failing to properly design and test them for the Facebook offering. The settlement is significant because exchanges are responsible for