By Lauren Tara LaCapra and Jennifer Saba
May 11 Bloomberg LP customers, including the
U.S. Federal Reserve and the U.S. Treasury, were examining on
Saturday whether there could have been leaks of confidential
information, even as the media company restricted its reporters'
access to client data and created a position to oversee
compliance in a bid to assuage privacy concerns.
The financial data and news company, whose computer
terminals are widely used on Wall Street, had allowed
journalists to see some information about terminal usage,
including when customers had last logged in, and how often they
used messaging or looked up data on broad categories, such as
equities or bonds.
Bloomberg CEO Daniel Doctoroff said in a statement on Friday
that the firm restricted reporters' access last month after a
The client, Goldman Sachs Group Inc, flagged the
matter to Bloomberg after a news service reporter in Hong Kong
asked the bank about a partner's employment status, noting the
person had not logged on in some time. Goldman found that
journalists had access to far more information than the bank had
known, and argued the information was sensitive and should not
be seen by reporters.
"Having recognized this mistake, we took immediate action,"
Doctoroff said in the statement posted on Bloomberg's blog. He
said the company had created a position of client data
compliance officer to ensure its news operations never have
access to confidential customer data. He added that even under
the previous policy, Bloomberg reporters could not see which
particular news stories clients read, or the specific securities
they viewed. Bloomberg has about 2,400 journalists worldwide.
While some said the concerns were overstated, the news
triggered fears about privacy of sensitive data at Wall Street
firms such as Goldman Sachs and JPMorgan Chase & Co as
well as at the Fed and some U.S. government departments that use
A Fed spokeswoman said on Saturday that "we are looking into
this situation and have been in touch with Bloomberg to learn
more." A source briefed on the situation said the Treasury
Department was looking into the question as well.
Senior Goldman executives argued that while the information
Bloomberg reporters had was limited, a trader could easily make
money just by knowing what type of securities some high-profile
users were looking at, or what questions a government official
raised with Bloomberg's help desk, people with direct knowledge
of their views said.
They also began to worry about who else had access to such
information. The issue made people inside the bank uncomfortable
even with Bloomberg's marketing and sales team's access to
information, they said.
For instance, if a trader pulls up quotes for a certain type
of security several times, sometimes a message pops up from
Bloomberg customer support staff offering other products and
functions that might be useful. While this was once seen as a
common practice, it has started to make traders uncomfortable
about who has access to their personal information, the sources
Bloomberg pointed to Doctoroff's statement on Friday and
declined to comment further.
Privately held Bloomberg gets the bulk of its revenue from
terminal sales to financial institutions. The company has more
than 315,000 terminal subscribers globally, with each Bloomberg
terminal costing more than $20,000 a year. Last year, it posted
revenue of $7.9 billion.
A person briefed on the situation at Bloomberg said on
Friday that no Bloomberg clients had so far canceled their
subscriptions because of the issue.
John Brynjolfsson, chief investment officer of hedge fund
Armored Wolf, said the concerns were overblown.
"Everyone, with a single brain cell, personally assesses the
tension between their privacy and their productivity,"
Brynjolfsson said. "Some I know keep their Bloomberg - and life
more generally - locked down, so people can't even find their
name to message them. They give their ID to those they want."
Thomson Reuters , the parent of Reuters
News, competes with Bloomberg. In a statement, Thomson Reuters
said its news division operates "completely independently with
reporters having no access to non-public data on its customers,
especially any data relating to its customers' use of its
products or services.
"Thomson Reuters collects and analyses customer data to
improve product functionality and customer experience. No
Reuters news staff have access to any of this data. There are
strict controls in place that limit the access of this
information amongst other Thomson Reuters staff," the company
At Goldman Sachs and other big clients including JPMorgan,
the level of information Bloomberg reporters had access to
deeply troubled executives, who were stunned to learn that what
they considered sensitive financial information could become
public, sources with direct knowledge of discussions inside the
After the Bloomberg reporter in Hong Kong approached the
bank in April, Goldman representatives took up the issue with
Bloomberg editors and executives of the company, including
Doctoroff. Goldman staff also called former Bloomberg
journalists to find out whether the practice of using clients'
login information was common, and to find out precisely what
journalists could see, these sources said.
At JPMorgan, the bank's public relations staffers also fumed
to one another last year that reporters called repeatedly to
inquire whether Bruno Iskil, the "London Whale" trader who was
part of a team that lost more than $6 billion in losses, had
left the bank because he had not logged onto his terminal in
several days, a source with direct knowledge of these
JPMorgan did not formally bring the matter to Bloomberg's
attention, the source said. Bloomberg said it had no record of a
Bloomberg's terminal has various command codes that with the
click of a few buttons allow users to look up news about
specific companies or topics, and data on specific securities or
broader markets. Subscribers can also see information on fellow
Bloomberg users, such as phone numbers, work titles, email and
Bloomberg messaging addresses. Inside Bloomberg, some employees
have access to much more detailed and current user data, for
sales and marketing purposes.
Journalists had access to some of that information, but not
all of it.