Bloomberg News Busted for Spying on Bankers
That’s what Bloomberg CEO Dan Doctoroff told employees in a companywide email following a complaint from Goldman Sachs that accused Bloomberg News journalists of using private subscriber information pulled from company data terminals to break news.
According to reports, Bloomberg journalists routinely gathered information from the company’s financial data terminals, which are widely used on Wall Street. While reporters weren’t able to see market-sensitive details like securities-level or trading data, they were able to see customer contact, login and usage data, and chat information between subscribers and customer service representatives.
Far from hard-core “big data,” but easily enough to gather insight into a trader’s interests and thinking. Indeed, sources at J. P. Morgan tell the Financial Times that the firm believes that Bloomberg reporters used login information to determine whether Bruno Iksil, the so-called “London Whale,” had left the bank. Other sources tell CNBC that a former Bloomberg employee used the company’s data terminals to view usage information on Federal Reserve Chairman Ben Bernanke and former U.S. Treasury Secretary Tim Geithner.
Sources say that a preliminary investigation into the incident by Bloomberg found that hundreds of reporters had misused the company’s terminals by trolling for scoops.
Just ask yourself this: How much would a hedge fund pay for the information Bloomberg journalists had?
— felix salmon (@felixsalmon) May 11, 2013
Bloomberg has since restricted its newsroom staff’s access to customer data, following the complaint from Goldman. It has also created a new client-data compliance officer to oversee customer data-security issues. Meanwhile, both the Federal Reserve and the U.S. Treasury Department are said to be scrutinizing the incidents.
Dow Jones & Co., publisher of AllThingsD and The Wall Street Journal, competes with Bloomberg in financial news and information.
Doctoroff’s note in full, below:
Since our founding more than 30 years ago, the proper safeguarding of customer data has been a central tenet of Bloomberg’s culture.
A Bloomberg client recently raised a concern that Bloomberg News reporters had access to limited customer relationship management data through their use of the Bloomberg terminal. Although we have long made limited customer relationship data available to our journalists, we realize this was a mistake.
Having recognized this mistake, we took immediate action. Last month we changed our policy so that all reporters only have access to the same customer relationship data available to our clients. Additionally, we decided to further centralize our data security efforts by appointing Steve Ross, one of our most senior executives, to the new position of Client Data Compliance Officer. Steve is responsible for reviewing and, if necessary, enhancing protocols which among other things will continue to ensure that our news operations never have access to confidential customer data.
To be clear, the limited customer relationship data previously available to our reporters never included access to our trading, portfolio, monitor, blotter or other related systems or our clients’ messages. Moreover, reporters could not see news stories that clients read, or the securities they viewed. Bloomberg has very strict data security policies in place, in addition to significant and rigorous training, processes and protocols. Upon hiring, all Bloomberg employees enter into confidentiality provisions, including Bloomberg News.
Client trust is our highest priority and the cornerstone of our business, and we are deeply committed to ensuring the complete integrity and confidentiality of our clients’ data in all situations and at all times.