Bloomberg’s recent admissions that it overstepped a boundary or two when it allowed reporters to regularly access clients’ customer relationship management data is more than just a tempest in a terminal. Major Wall Street firms are demanding to know more because of the potential confidentiality, compliance and security breaches that may have resulted from this high-tech snooping.
- Clients’ Login Creation Date when clients first fired up a Bloomberg terminal;
- Clients’ Login History, which is the information tracking when a user logged into the terminal;
- High-Level Usage Data by clients, which is information on which functions have been used and the information is aggregated over time “with no ability to look into specific security information,” Doctoroff says;
- And clients’ help desk inquiries about customer service requests and questions to reporters about news stories.
Wonder if anyone asked the Help Desk: “Why are you spying on me to get your news?”
I think the major reason reporters resorted to spying is because of a historic tension between Wall Street firms and the press that causes all parties to the battle to go overboard. Many firms want to stop any useful communication via the media and the media has to get the inside scoop amid a cutthroat and shrinking news market. This adds up to a conundrum as securities firms desperately want the news they are unwilling to divulge. This friction between big firms and big media will never go away no matter how many times regulators and investors push for more transparency.
Yet despite the pressures to get scoops Bloomberg should have shown more restraint. Unless there are more bombshells to come, I think this is a case of a very large, arrogant organization in desperate need of better quality, security and customer care controls, and a good dose of humility. I have toured the Bloomberg news-gathering and market data distribution empire and I am in awe of what it can do. There’s a reason why the Bloomberg machines are considered the Cadillacs of market data terminals at $20,000 per year (if anyone remembers GM’s luxury vehicles). It would be a shame if this media powerhouse learns nothing from this episode.
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