The Securities and Exchange Commission has approved a plan offered by the Nasdaq OMX to compensate investors for Facebook botched 2012 initial public offering.

Under the current plan, Nasdaq will offer $62 million as compensation, higher than the $40 million figure Nasdaq CEO Robert Greifeld originally submitted for approval. Laws preclude exchanges from being held liable for public offerings that go awry, but the SEC has said it will allow Nasdaq to exceed a previous ceiling for these payments in order to help plug investors' losses.

The settlement could mark the end to a long-running drama that pitted the social network against the Nasdaq and Wall Street trading firms.



Global banks like Citigroup and Swiss giant UBS sustained steep losses on the IPO. UBS, where losses topped $350 million, has since filed a lawsuit against the Nasdaq blaming it for the problems. Market-making brokerages like Citadel and Knight Capital lost roughly $30 million a piece in the debacle, with the losses at Knight being one of the issues that forced the Wall Street firm to sell itself to rival Getco.

Sources had previously told CNBC that a settlement between Nasdaq and the SEC could see the exchange operator subjected to additional fines, perhaps as high as $5 million, for its role in Facebook's rocky public offering.

However, in its public statement, the SEC said it is not taking a view on whether Nasdaq broke any laws or violated any regulations — a move that could insulate Nasdaq from further fines.

In a single stroke, Facebook's stock flotation transformed what should have been a business coup into a full blown public relations nightmare for Nasdaq.

The social network's IPO was one of last year's most heavily coveted offerings, with both the electronic stock market — the traditional home for technology start-ups — and its arch-rival NYSE-Euronext vying for the listing.

-- writing and additional reporting by CNBC's Javier E. David