Chatter of data security concerns has been echoing across Wall Street this week after it was revealed that Bloomberg reporters may have routinely misappropriated sensitive information from proprietary data terminals to help break news.
The news arm of the company monitored when subscribers had logged onto the service, which allows companies to access Bloomberg's services to analyze and monitor the financial market and trades, to find out which types of functions they had looked at. These services, which are found in almost every banking and trading company, according to the New York Times, cost an average of more than $20,000 per year. The company said it was a mistake to allow reporters to look at this information and disabled it after Goldman Sachs complained that a reporter had pointed out that a partner had not logged into the program lately when inquiring about that particular person's employment status.
Following this incident, many prominent financial service professionals have become very concerned about the link between this terminal business and the Bloomberg news room. The Times said it is threatening the credibility of both services, as Wall Street relies on the secure and timely transmission of data between qualified traders. If Bloomberg's services are seen as a conflict of data security interests, it could be viewed as a huge problem for these businesses.
"On Wall Street, anonymity is critically important. Secrecy and the ability to cover one's tracks is paramount," said Michael J. Driscoll, a former senior trader at Bear Stearns who now teaches at Adelphi University, according to the news source. "If Bloomberg reporters crossed that line, that's an issue."
The New York Post first reported on this abuse of the Bloomberg terminal service by reporters, with analysis showing that there may have been several hundred reporters that have used the controversial technique. Bloomberg has more than 2,400 journalists employed worldwide, so the use of the service in this way has potential to have been spread even more than this.
Insiders told the Post that Bloomberg employees could not only tell which employees logged onto the service, but how many times they used certain functions. This has left many wondering just how secure their information is on this service and if other private aspects of their business have been leaked without their knowledge.
"You can basically see how many times someone has looked up news stories or if they used their messaging functions," said one Goldman insider, according to the news source. "It made us think, 'Well, what else does [Bloomberg] have access to?'"
Making matters worse is new information that has been released by the Financial Times. This news organization found that more than ten thousand private messages were sent between users of the Bloomberg financial terminals were leaked online. This will likely make it ever harder for the company to gain back its credibility as it struggles to restore faith in the privacy of its services among Wall Street thought leaders. There are now two long lists that show messages between traders are some of the world's largest banks and their clients, the Times said. This will clearly make the road to redemption that much harder for Bloomberg as officials try to save face with both private sector clients and increasingly concerned government regulators.
Fallout from this issue
Thus far, the Post reports that no reports have lost their job over this issue. Bloomberg spokesman Ty Trippet said in light of concerns, journalists no longer have any access to customer relationship information. According to Forbes, Matt Winkler, Bloomberg's editor-in-chief, said reporters should not have access to any of this kind of information, adding that he is apologetic that he did and saying that it is an inexcusable incident.
However, Forbes said calling it an error makes this incident sound like something that happened due to carelessness or bad judgment, when in fact there was a decision to let these reporters look at privileged information, Winkler said.
"There was good reason for this, as our reporters used to go to clients in the early days of the company and ask them what topics they wanted to see covered," he writes. "Understanding how clients used the terminal was more important then."
Forbes said whether this information was used innocently or not, it likely will not have much effect, as the invasion doesn't really mean much compared to the value of this subscription to customers of the company. Even so, news organizations will need to start thinking about the implications of sharing sides of their other revenue and advertising with reporters, as companies will want to have more trust in the security of the company they are working with.
Data Security News from SimplySecurity.com by Trend Micro