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Bloomberg editor apologizes for snooping on clients


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First published May 13 2013 04:38PM
Updated May 13, 2013 04:38PM

New York • The editor-in-chief of Bloomberg News apologized Monday for the financial news service’s practice of accessing private data on clients through the company’s information service.

Journalists at Bloomberg News, until recently, had been able to see when clients last accessed their Bloomberg information terminals and what broad categories of functions they used. Goldman Sachs had complained that a Bloomberg reporter was using the information to investigate if a Goldman employee had departed.

"Our client is right," editor-in-chief Matthew Winkler said in an online posting Monday. "Our reporters should not have access to any data considered proprietary. I am sorry they did. The error is inexcusable."

It was a striking admission from the man who wrote "The Bloomberg Way: A Guide for Reporters and Editors," considered among the quintessential handbooks on ethical business reporting.

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 journalists are renowned for aggressive techniques in a competitive field. Bloomberg News is owned by Bloomberg LP, a private company controlled by New York Mayor Michael Bloomberg. Bloomberg LP’s main business is selling terminals to clients in the financial industry, and it employs more than 2,400 journalists. (Michael Bloomberg stepped back from the company’s day-to-day operations when he became mayor of New York.)

Bloomberg News reporters had been able to see when any of the company’s 315,000 paying subscribers had last logged into the service. They could also view the types of "functions" individual subscribers had accessed.

For instance, reporters could 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.

More than 315,000 Bloomberg subscribers worldwide use the terminals for instant market news, trading information and communication. Reporters at Bloomberg News, a separate division from the terminal business, were nonetheless told to use the terminals to get an edge in the competitive world of financial journalism where every second counts, according to former employees, who asked not to be identified because of the company’s strict nondisclosure agreements.

Bloomberg’s more than 2,400 journalists go through hours of compulsory training on how to use the superfast data-splicing terminals, and several former employees said that training included tips on how to use a function called UUID to locate sources who were also subscribers.

The sheer amount of data available on the terminals created a dynamic in the Bloomberg newsroom that favored breaking news over strict subscriber confidentiality, former reporters said.

Bloomberg reporters also are accused of monitoring JPMorgan Chase executives’ login information last summer, when the bank suffered a multibillion-dollar trading loss, according to people briefed on the situation. The bank never formally complained to Bloomberg representatives about the practice.

The news operation was assembled in the 1990s primarily as a way to sell more terminals. Reporters regularly accompanied sales representatives to push subscribers on the wonders of the terminal, the desktop computers that provide a constant stream of headlines and data and sit upon many traders’ desks.

The UUID function at the center of the controversy provided background on an individual subscriber, including contact information, and when the subscriber had last logged on. An internal Bloomberg review conducted after Goldman Sachs complained last month that a reporter had inquired about a partner’s employment status after tracking the executive on UUID, revealed that "several hundred" reporters had used the technique. Trippet, the company spokesman, said no reporters had been fired.

In 2011, Erik Schatzker, the host of Bloomberg Television’s "Market Makers" show, said on the broadcast that he had used a terminal subscriber’s data to report on a finance executives’ employment status. The episode set off concerns inside the newsroom.

After Schatzker made the remarks, which were first reported by BuzzFeed on Saturday, Bloomberg conducted an internal review. Executives thought the terminal functions that allowed reporters to see subscriber data had been disabled, said one person briefed on the review.

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