Nasdaq has written a cheque for $10 million, the largest penalty ever levied against a stock exchange, to make a civil case over its handling of the Facebook IPO go away.

The U.S. Securities and Exchange Commission said Nasdaq's "ill-fated decisions" on the day of the IPO led to a series of regulatory violations. Nasdaq senior executives were aware of technical problems but decided to open up Facebook stock for secondary trading without fixing the problems first.

The exchange's chief economist spotted discrepancies in trading volume, and complaints from market makers started to mount. Still, exchange management decided not to halt trading, the SEC said. More than 30,000 Facebook orders remained stuck in Nasdaq's system for more than two hours when they should have been either executed or cancelled. Investors were left in the lurch and market makers lost an estimated $500 million.