Fed, Treasury to probe Bloomberg's data security after privacy breach
Bloomberg employees are even said to have accessed details of ex-Fed chief Alan Greenspan's contacts with the company's help desk.
The inquiry follows revelations Goldman Sachs and JP Morgan Chase were angered that Bloomberg reporters were using the terminals to identify employees who might have left the two banks.
Bloomberg chief executive Dan Doctoroff has declared the practice a "mistake" and 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.
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 employees were familiar with the internal function on the terminal that allowed them to observe client use, including 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 and helped swell annual sales to about $US8 billion. New York mayor Michael Bloomberg, with an 88 per cent stake in the firm, is worth about $US27 billion and the 13th richest person on the planet, Forbes magazine said in March.
Employees have also been able to see the time and date a user last logged onto the service - hence the reporter inquiries into whether certain Goldman or JP Morgan staff were still in a job.
A more recent offering, though, may cause more concern. Queries to the help desk about how to deploy complex analytics to determine the relative value of a particular asset may inadvertently have helped tip off reporters.
The wide internal access to such interactions may be less amusing if authorities suspect insider information at play. Certainly, the action to bar Bloomberg's 2000-plus reporters from such access in the future, still leaves open the question: what of its 13,000 other employees?
The author is a former Bloomberg employee.
Frequently Asked Questions about this Article…
US Treasury and the Federal Reserve are examining reports that Bloomberg reporters used internal Bloomberg Terminal functions to track officials' and clients' activity on the terminals, including who accessed what data and when. The probe follows revelations about reporters viewing customer usage details and help-desk interactions.
The article says Bloomberg staff could use internal functions to see client usage patterns (like how often category keys were tapped), last login times and help‑desk queries. Reporters allegedly used those tools to identify contacts and monitor activity, and some employees accessed details of ex‑Fed chief Alan Greenspan's help‑desk contacts.
Goldman Sachs and JP Morgan Chase were reported to be angered that Bloomberg reporters used terminal data to identify employees who might have left the banks. Everyday investors should care because the issue raises questions about data privacy, potential insider information and the trust between financial firms and data providers.
Yes. Bloomberg CEO Dan Doctoroff said the company changed its policy so reporters only have access to the same customer relationship data available to clients. The company also reportedly barred its 2,000‑plus reporters from that internal access, though the status of other employees remains a question in the article.
According to the article, none of Bloomberg's roughly 315,000 paying customers is known to have cancelled the service as a result of the revelations so far.
The article notes concern that wide internal access to client interactions and help‑desk queries could tip off reporters and may draw regulatory scrutiny if authorities suspect insider information was involved. That's why Treasury and the Fed are reported to be investigating.
The story highlights that Bloomberg employees historically could see user activity and help‑desk interactions. Users should be aware those controls existed, note the recent policy changes restricting reporter access, and watch for any further steps Bloomberg or regulators take to strengthen client data protections.
The article reports Bloomberg's annual sales grew to about US$8 billion. New York Mayor Michael Bloomberg owns an 88% stake in the firm and was estimated by Forbes to be worth about US$27 billion.
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