Breaking down the Bloomberg terminal scandal

0
A screen capture from the television program "Bloomberg Surveillance."

A screen capture from the television program “Bloomberg Surveillance.”

A complaint filed by a Goldman Sachs official has broken open a scandal at Bloomberg News involving how journalists accessed account information for the company’s terminal clients. To understand the scandal, here’s a breakdown of the company and the story:

What is Bloomberg?

Bloomberg L.P. is a company that distributed business and financial information to professionals around the world. Bloomberg sells terminals — specialized computers that distribute real-time data like stock quotes, breaking news and analysis while allowing professionals to make trades in the stock market — that are used mainly in the news and financial industry.

Bloomberg’s terminal computer business makes up a good chunk of the company’s profit. Bloomberg leases out its terminal computers for around $1,500 a month per user.

Along with its terminal business, Bloomberg also operates several editorial properties, including Bloomberg Television, Bloomberg Radio and Bloomberg BusinessWeek. Hundreds of journalists work for Bloomberg around the world.

What happened?

According to the New York Post, an unidentified Bloomberg journalist asked a Goldman Sachs employee about the status of another bank employee during a recent interview. The Bloomberg journalist noted that the bank employee at focus had not accessed their Bloomberg terminal in a while. This prompted Goldman Sachs to complain to Bloomberg that their journalists had too much access to information about the company’s terminal clients.

Bloomberg confirmed its journalists had access to some client information, including when a client had logged on to their terminal and what type of information that client had looked up. According to the New York Times, the company admitted that the access was a mistake, adding that journalists had “for years” been able to access client information that otherwise should have been private.

Who was impacted?

Bloomberg terminals are in use by many financial and government institutions around the world, including banks, the United States Federal Reserve — even the Vatican. It is not known how many people have been impacted by the privacy scandal. Along with Goldman Sachs, it has been alleged by a former Bloomberg News employee that client information for Federal Reserve Chairman Ben Bernanke and former United States Treasury Secretary Tim Geithner had been accessed by at least one Bloomberg journalist (CNBC, which uses financial information by Bloomberg’s business rival Thomson Reuters and is a competitor with Bloomberg Television, broke the story on Saturday). It is unclear who else was impacted.

The privacy scandal widens

As noted above, Bloomberg L.P. has admitted that giving journalists access to the information of its terminal clients was a mistake. Questions are now arising as to how much access Bloomberg reporters had to client information in the terminal and for how long.

According to a report by Peter Lauria with BuzzFeed, the company knew its journalists was misappropriating information from its terminal clients since 2011. Bloomberg Television anchor Erik Schatzker was reprimanded by the company “for making on-air comments about terminal data to track the activities of at least one story subject.” Sources told Lauria that the matter was “a very big deal” within the newsroom.

BuzzFeed’s unnamed source at Bloomberg said company executives promised the function that allowed journalists to access client information would be disabled. The feature, presumably, was still active when the New York Post published its story on Friday.

New York Post: Goldman Sachs worried over Bloomberg snooping
New York Times: Privacy breach on Bloomberg’s terminals
BuzzFeed: Bloomberg knew of terminal “feature” in 2011
CNBC: Bloomberg journalist accessed Bernanke info on terminal
Quartz: At Bloomberg, more opacity than transparency