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Privacy Breach on Bloomberg Data Terminals

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Gold Coins
Gold Coins

I’ve never had the opportunity to use a Bloomberg terminal, but this seems like a fairly large and systemic breach of trust. If I was a corporation with a contract with Bloomberg, I’d seriously look into canceling it, or at least not renewing without financial concessions.

The company confirmed that reporters at Bloomberg News, the journalism arm of Bloomberg L.P., had for years used the company’s terminals to monitor when subscribers had logged onto the service and to find out what types of functions, like the news wire, corporate bond trades or an equities index, they had looked at. Bloomberg terminals, which cost an average of more than $20,000 a year, are found in nearly every banking and trading company.

Bloomberg said the functions that allowed journalists to monitor subscribers were a mistake and were promptly disabled after Goldman Sachs complained that a Bloomberg reporter had, while inquiring about a partner’s employment status, pointed out that the partner had not logged onto his Bloomberg terminal lately.

The incident led to broader concerns about the line at Bloomberg between its lucrative terminal business and the hypercompetitive newsroom, threatening to undermine the credibility of both. In a secretive world that thrives on opacity, traders and financial firms jealously guard every speck of information about their activity to avoid tipping their hand on their trades and investments.

“On Wall Street, anonymity is critically important. Secrecy and the ability to cover one’s tracks is paramount,” said Michael J. Driscoll, a former senior trader at Bear Stearns who now teaches at Adelphi University. He added: “If Bloomberg reporters crossed that line, that’s an issue.”

 

…In the early 1990s, when Bloomberg L.P. had just started to build its news division, reporters were encouraged to leverage the terminals as a way to get a leg up on the competition, said several former employees who would discuss practices only anonymously. Reporters often went on sales calls to talk to banks and hedge funds about the news division to help the company sell terminals. The practice became much less pervasive as Bloomberg became an established news outlet, although many Bloomberg veterans still consider the news division solely a means to sell more terminals.

(click here to continue reading Privacy Breach on Bloomberg’s Data Terminals – NYTimes.com.)

Eyeing John Marshall Law School
Eyeing John Marshall Law School

more from Zachary Seward:

Bloomberg LP is in damage-control mode. Some of its largest customers have publicly accused the firm’s journalists of snooping on their usage of Bloomberg terminals, the firm’s wildly profitable information service for investors.

 …

Every Bloomberg terminal customer knows you just need to tap twice on the greenbutton in the top-left corner of the keyboard in order to chat with a customer service representative. Fewer of them are aware that the transcripts of those conversations are stored by the company and could be viewed by any employee.

Several former Bloomberg employees say colleagues would look upchat transcripts of famous customers, like Alan Greenspan, for amusement on slow workdays. The transcripts were typically mundane and hardly incriminating, but who wouldn’t enjoy watching a former US Federal Reserve chairman struggle to use a computer? And, in theory, the substance of someone’s query to customer service could reveal specific information that he’s interested in, tipping off a reporter to a story.

It’s common for companies to keep logs of their interactions with customers. What makes Bloomberg different is that any employee, including journalists, could access those logs through thefunction on their terminals. Trippet said that access was revoked from journalists.

(click here to continue reading What Bloomberg employees can see when they snoop on customers – Quartz.)

Electric Eye
Electric Eye

and worse of all, Bloomberg knew about it a while ago, but didn’t think it a problem, as Buzzfeed reports:

Executives at the financial information company Bloomberg have known about journalists using the company’s terminals to spy on clients at least since September 2011 — more than a year before the practice turned into a scandal that threatens the company’s relationships with its clients. That month, Erik Schatzker, an anchor at Bloomberg TV and host of “Market Makers,” was reprimanded for making on-air comments about using terminal data to track the activities of at least one story subject, according to two sources with knowledge of the situation. One source said the matter was a very big deal internally but was handled quietly.

Editorially, this information was seen as so benign that surfacing it was an open practice, if not openly encouraged. Internally, reporters are taught to “harness the power of the terminal” to mine for stories, one former newsroom source said. Bloomberg reporters can see the aggregate number of readers for a specific story, but cannot identify the individual readers.
Indeed, not unlike at some other digital media companies, sources said half of the annual bonus for Bloomberg reporters is based in part on story views, so seeing which stories are gaining traction among readers is valuable in helping reporters determine what to chase. According to the former newsroom source, reporters pitch a lot of what Bloomberg calls “people movers” stories (i.e., a Morgan Stanley banker being hired by UBS) because they get a lot of traction among clients.

(click here to continue reading Bloomberg Execs Knew Journalists Were Tracking Clients In 2011.)

Written by Seth Anderson

May 11th, 2013 at 6:12 pm

Posted in Business

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