Bloomberg privacy revelations no big surprise to some
Both the US Treasury Department and the Federal Reserve are reported to be examining the extent to which Bloomberg reporters tracked officials' use of information carried on the Bloomberg terminal, a device that dominates trading desks from New York to London and beyond.
Bloomberg employees are even said to have accessed details of ex-Fed chief Alan Greenspan's contacts with the company's help desk.
The probe follows revelations Goldman Sachs and JPMorgan Chase were angered that Bloomberg reporters were using the terminals to identify employees who might have left the two banks. Bloomberg's chief executive Dan Doctoroff has declared the practice a "mistake", and company executives have reportedly apologised in person to executives of Goldman Sachs, one of its biggest customers.
"Last month we changed our policy so that all reporters only have access to the same customer relationship data available to our clients," Mr Doctoroff said in a statement.
Whether the aggrieved customers will be satisfied with reduced reporter access remains to be seen, although apparently none of Bloomberg's 315,000 paying customers is known to have cancelled the service over the breach.
Even 10 years ago, many Bloomberg employees were familiar with the internal function on the terminal that allowed them to observe client use. The so-called UUID function identifies, for instance, whether a customer is interested in equities or bonds by revealing the number of times certain category keys are tapped.
On the one hand, such knowledge enabled Bloomberg to hone its service. A customer might be contacted to see if additional training was needed to boost usage and, therefore, dependence on the $20,000-a-year (at current rates) "machine". Such attention has helped swell annual sales to about $8 billion.
Still, it was clear even back then that clients might not welcome the one-way transparency of their activities. "Better not let on that we can see this information," might have summed up the internal sheepishness.
A more recent offering, though, may cause more concern on Wall Street and beyond. Given the ever-growing complexity of the Bloomberg offering, the near-instantaneous "help" function is likely to have been popular. Queries to the help desk about how to deploy complex analytics to determine the relative value of a particular asset, say Apple bonds, may inadvertently have helped tip off reporters.
The wide internal access to such interactions, including into what puzzles Alan Greenspan, may be less amusing if the Fed or other authorities suspect insider information at play.
And while financial markets are unlikely to lose their addiction to Bloomberg news and data, authorities might ask a bigger question: should a single firm be permitted to control about half a global industry even if it can keep its secrets.
The author is a former Bloomberg employee.
Frequently Asked Questions about this Article…
The Bloomberg privacy revelations refer to reports that some Bloomberg reporters accessed data from the Bloomberg terminal that tracked customers' usage and help-desk queries. Investors should care because the issue raises questions about data privacy, potential insider information and the integrity of a service that many traders and portfolio managers rely on for market-moving data and analysis.
According to the article, reporters used internal functions such as the UUID feature — which can show how often users tap certain category keys (indicating interest in equities, bonds, etc.) — and accessed help-desk interactions. Those internal access points reportedly allowed staff to view customer queries and, in some cases, details of contacts like those involving ex‑Fed chief Alan Greenspan.
Yes. The article reports that both the US Treasury Department and the Federal Reserve are examining the extent to which Bloomberg reporters may have tracked officials' use of the terminal and whether that created concerns about insider information.
Bloomberg's CEO Dan Doctoroff called the practice a "mistake" and the company reportedly apologised in person to executives at affected clients such as Goldman Sachs. The company also changed its policy so reporters now have access only to the same customer relationship data available to clients.
The article notes that Bloomberg has about 315,000 paying customers and that, as of the report, none of those customers was known to have cancelled the service over the breach.
The article suggests this is a real concern: help-desk queries about complex analytics or a customer’s interest in specific assets (for example, Apple bonds) might inadvertently tip off reporters. Regulators may investigate whether any of those interactions crossed the line into sharing or exploiting insider information.
The UUID function tracks how often certain category keys are used, revealing whether a customer is focused on equities, bonds or other markets. For investors this matters because it shows how Bloomberg gathers user-behaviour data to improve its product and sales, but it also highlights privacy trade-offs when that information is visible internally.
The article argues that markets are unlikely to stop depending on Bloomberg’s news and data, given its entrenched role, price (about $20,000 a year at current rates) and scale (roughly $8 billion in annual sales). However, the episode may prompt regulators and clients to question whether one firm should control a large share of the global industry and how transparently it protects customer information.
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