It’s been an interesting week for boundaries, snooping and privacy in our brave, new open-source world. The IRS admitted to pursuing right-wing conservative groups since 2010, the Justice Department secretly viewed e-mails from reporters at the Associated Press and Bloomberg News scribes viewed details of investment bigwigs use of their Bloomberg terminals.
In a big data world, the lure of snooping and spying is apparently too much - especially from people who should know better.
[Credit Suisse fires former veep for allegeldy stealing client secrets.]
With the threat of investigations from the U.S. Treasury and Federal Reserve, Bloomberg News is in damage control mode. In a blog from Bloomberg News CEO the media giant has created a new position, Client Data Compliance Officer. Matthew Winkler, the editor in chief of Bloomberg News, is assuring customers and his news audience while downplaying what what his reporters were able to view as they were conducting their research. Stating that reporters could not view data or IMs sent over clients' Bloomberg terminals, he writes:
Now let’s also be clear what our reporters had access to. First, they could see a user’s login history and when a login was created. Second, they could see high-level types of user functions on an aggregated basis, with no ability to look into specific security information. This is akin to being able to see how many times someone used Microsoft Word vs. Excel. And, finally, they could see information about help desk inquiries.
So, why were reporters snooping in the first place? Winkler says this is a Bloomberg tradition of seeing what clients and potential story sources have checked in on to see what is important to them. "Understanding how clients used the terminal was more important then. We still do that today, which is why we have feedback tabs on our news-related terminal functions," he writes.
(Gee, maybe editors could tell reporters to ask the subject what matters to them. What keeps you up at night? What topics or trends matter to you and your clients?)
Is this a big deal in a day and age when people are expected to compromise their privacy every time they venture out on the web? Sure, we get to use Facebook and Gmail for free so that they can scrape our posts and frame our browser with ads for the things that interest us. I clicked on a few pictures of guitars and now every Facebook session looks like Eric Clapton’s brain - Fender Stratocasters everywhere.
That said, we’re not talking about free ads so you can connect with your family and friends. This is an aggressive media powerhouse that prides itself on long hours for journalists who, as a former colleague who worked there put it, are measured by how often their news stories move the market.
It also sells and "provides" tools to traders who find them indispensable and pay an estimated $20,000 a year for a Bloomberg terminal that includes news feeds, market data, trading tools and instant messaging features. This puts harried and scared reporters in a unique position of power. I wonder what the SEC Chief is searching for? What are the guys at Goldman Sachs viewing these days? Let’s play “who is Jamie Dimon IM-ing?”
Even with this news scandal, it's hard to fathom traders shutting off their Bloomberg Terminals anytime soon - imagine taking your teen’s iPhone away for a week - but cracks in confidence will appear sooner or later. CIOs and their lawyers need to go through their service agreements to see what data security measures are in place - even as Bloomberg suits beat their chests and vow "Never again."
If a company that delivers everything from breaking news, market data and an OMS has the ability to view what you do with their device - and they surely do have that ability - is there anything to stop them from doing so?
At the very least, tell your traders that effective immediately, they can no longer use the IM feature on their Bloomberg terminal. Even for one day.
That should get Bloomberg’s attention. Phil Albinus is the former editor-in-chief of Advanced Trading. He has nearly two decades of journalism experience and has been covering financial technology and regulation for nine years. Before joining Advanced Trading, he served as editor of Waters, a monthly trade journal ... View Full Bio