Newsmax TV & Webwww.newsmax.comFREE - In Google Play
Newsmax TV & Webwww.newsmax.comFREE - On the App Store
Tags: Bloomberg News | Leaks | Private | Messages

Bloomberg Executive Apologizes Amid New Report of Leaks

Tuesday, 14 May 2013 07:25 AM EDT

Financial data and news service Bloomberg LP moved to repair damage to its reputation as a published report said that more than 10,000 of its clients' private messages containing sensitive pricing data had been leaked online.

The report came as Bloomberg News editor-in-chief Matthew Winkler apologized for the news service's practice of allowing journalists to access data about how clients used the company's financial data services.

Reporters have had access to the data, Winkler said, since the 1990s but it was revoked last month after investment bank Goldman Sachs complained.

Bloomberg's data services provide financial market information and news, an instant messaging program and trading platforms to users. The services, which are mainly accessed by way of the company's proprietary computer terminals, are widely used in the financial industry and beyond. More than 315,000 clients pay roughly $20,000 per year for the right to use them.

The mishaps involving Bloomberg's handling of what traders had thought was private information were seen as damaging but not insurmountable for the news juggernaut founded by New York City Mayor Michael Bloomberg in 1981.

Bloomberg and its rival Thomson Reuters Corp. each have around a 30 percent share of the $25.5 billion market for financial data and investment services, according to Douglas B. Taylor, founder and managing partner of Burton-Taylor International Consulting LLC, which tracks the industry. Bloomberg's annual revenue was $7.9 billion in 2012, about 85 percent of which was generated from terminal sales.

Because both companies have different strengths — Bloomberg in debt markets and Thomson Reuters in foreign exchange — Taylor believes it's unlikely that the latest incidents will spark mass cancellations among Bloomberg's clients.

Other observers shared the view.

"This is an embarrassment for Bloomberg, but I don't think it's likely to cause any significant disruptions in market share," said Peter Appert, an analyst for investment bank Piper Jaffray & Co.

A spokeswoman for Bloomberg would not immediately confirm the leak reported by The Financial Times. It said Monday that messages between traders at dozens of large banks from one day in 2009 and one in 2010 had been put online by a former Bloomberg employee.

The Financial Times said it was possible the employee intended them to be uploaded to a secure site.

A Bloomberg spokesperson told the newspaper the post was a "clear violation of our policies" and added that it was considering legal action on the matter.

Earlier Monday, Winkler apologized in an online post. He explained that journalists at Bloomberg News, until recently, had been able to see when clients last accessed their Bloomberg terminals. They were also able to view broad categories of functions that clients used, such as one that looks up credit ratings.

When a client enters a command such as "BANKS," for example, the terminal brings up a table of credit default swap prices for 30 banks. Before the recent changes, a Bloomberg journalist would be able to tell if a particular user issued the command in the past week.

Goldman Sachs had complained to Bloomberg management about the practice after a Bloomberg reporter told the company that she had used log-in data as a clue in her investigation into whether a Goldman employee had departed.

"Our client is right," Winkler said in the post. "Our reporters should not have access to any data considered proprietary. I am sorry they did. The error is inexcusable."

The Federal Reserve is looking into whether Bloomberg journalists tracked data about terminal usage by top Fed officials. In a brief statement Monday, the European Central Bank said it "takes the protection of confidentiality very seriously and our experts are in close contact with Bloomberg."

Bloomberg News is owned by Bloomberg LP, a private company controlled by New York Mayor Michael Bloomberg, who is reported to own about an 85 percent share. The mayor is not involved in day-to-day decision-making at the company but he can be involved in such major things as asset sales or borrowing.

He declined to comment on the matter at an event Monday about the progress made cleaning up a polluted city canal.

"I can't say anything," he said, invoking a longstanding city Conflict of Interest Board ruling that limits his involvement in the company. "You'd have to talk to the company."

Although Bloomberg LP's main business is selling terminals to clients in the financial industry, its news service employs more than 2,400 journalists.

Bloomberg News reporters had also been able to see if subscribers had been looking at top news stories, or if they had been gathering data on stocks or bonds, but not which stories or bonds and stocks they had looked up, according to Bloomberg LP spokesman Ty Trippet.

He said reporters could also see if subscribers were using "message" or "chat" functions to send messages to each other over the terminals, but not the recipient of the messages or their content. Reporters were mostly getting contact information for subscribers, such as telephone numbers and email addresses, Trippet said.

Bloomberg cut journalists off from this type of access last month, after the Goldman complaint. In the posting Monday, Winkler drew a distinction between this type of data and "important" customer data, which he said has not been compromised.

Several investment banks and brokerage firms that use Bloomberg data services declined to comment Monday. Representatives for a couple of the firms voiced doubts that the revelations would change their firms' use of Bloomberg terminals.

But Caesar Andrews, a professor at the University of Nevada, Reno, Reynolds School of Journalism, said the accessing of client data by Bloomberg reporters was an inappropriate, clear-cut violation of basic ethics.

"It's not hard to imagine that companies will want some sturdy form of verification or assurance that this will no longer happen," Andrews said. "I can't imagine companies are just going to shrug their shoulders and say, 'this happens every now and again, let's move on.'"

© Copyright 2024 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

Financial data and news service Bloomberg LP moved to repair damage to its reputation as a published report said that more than 10,000 of its clients' private messages containing sensitive pricing data had been leaked online.The report came as Bloomberg News editor-in-chief...
Bloomberg News,Leaks,Private,Messages
Tuesday, 14 May 2013 07:25 AM
Newsmax Media, Inc.

Sign up for Newsmax’s Daily Newsletter

Receive breaking news and original analysis - sent right to your inbox.

(Optional for Local News)
Privacy: We never share your email address.
Join the Newsmax Community
Read and Post Comments
Please review Community Guidelines before posting a comment.
Get Newsmax Text Alerts

Newsmax, Moneynews, Newsmax Health, and Independent. American. are registered trademarks of Newsmax Media, Inc. Newsmax TV, and Newsmax World are trademarks of Newsmax Media, Inc.

© Newsmax Media, Inc.
All Rights Reserved
© Newsmax Media, Inc.
All Rights Reserved