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The practice became an issue when a Bloomberg reporter told Goldman Sachs managers she had used log-in data to investigate whether a Goldman employee had departed. Goldman Sachs complained, and now the Federal Reserve is examining whether Bloomberg journalists tracked terminal usage by top Fed officials.
It’s hard to overstate the role that the pricey Bloomberg terminals have come to occupy at Wall Street firms, where they are prized as windows to information that can help brokers keep or lose fortunes, while communicating via instant-messaging and executing trades. More than 315,000 clients pay roughly $20,000 a year each for their use.
Last year, the terminal business provided about 85 percent of the company’s $7.9 billion in revenue, giving it claim to about a 30 percent share of the $25.5 billion market for financial data and investment services, roughly the same as rival Thomson Reuters Corp. Analysts who follow the industry have said they expect little fallout for Bloomberg because clients consider its services vital and are locked into long-term contracts.
But its missteps nevertheless revive questions about the methods reporters use to get at hidden secrets about powerful interests, said Peter Hart, a media analyst with the watchdog group Fairness & Accuracy in Reporting.
While the nature of the lapses are unique, Hart said they remind him of the 1998 scandal at The Cincinnati Enquirer, which was forced to retract an 18-page exposé of Chiquita International’s business practices when it became clear a reporter had hacked into the banana giant’s phone system to obtain information.
Breaking into another company’s technical infrastructure was clearly an ethical and legal violation. But, Hart asks, how much more acceptable is it for reporters to use their parent company’s own technology to gather information on the sly?
Crossing the line • Ben Smith, editor-in-chief of BuzzFeed, a rapidly growing news site that uses technological feedback to tailor content, called the Bloomberg lapses unique. But he said they show how technology allows journalists from new and old media to venture into places that previously would have been outside ethical bounds.
"Everybody knows the rules," Smith said, "but a lot of the lines are a lot easier to cross than they used to be, when you used to have to walk through somebody’s locked doors and pick up a piece of paper from their desk."
Hart expects most of the company’s well-heeled customers to decide that it is better to handle their displeasure with the company privately rather than in public.
"But in the world of journalistic ethics, I think a story like this is going to raise some pretty profound and potentially disturbing questions about journalists snooping on their sources," he said. "Some battles are waged in private, and I think this is probably going to be one of them."
Jones, the media expert at Harvard, said he was willing to accept the company’s assertion that the snooping was a mistake. But he called it indicative of a culture where privacy is disrespected, and not just at Bloomberg.
"I think if I were one of Bloomberg’s terminal customers I would be reassured, to a point, by their telling me that this is a mistake and it wouldn’t happen again," he said. "But I think you’d have to be very naive to think it couldn’t happen again ... anywhere."
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