Saturday, May 11, 2013

"Several Hundred" Bloomberg Reporters May Have Extracted Private Subscriber Information

NYT is getting into the act and reporting on the terminal spying conducted by Bloomberg reporters:
A shudder went through Wall Street on Friday after the revelation that Bloomberg News reporters had extracted subscribers’ private information through the company’s ubiquitous data terminals to break news.

The company confirmed that reporters at Bloomberg News, the journalism arm of Bloomberg L.P., had for years used the company’s terminals to monitor when subscribers had logged onto the service and to find out what types of functions, like the news wire, corporate bond trades or an equities index, they had looked at. Bloomberg terminals, which cost an average of more than $20,000 a year, are found in nearly every banking and trading company.

Bloomberg said the functions that allowed journalists to monitor subscribers were a mistake and were promptly disabled after Goldman Sachs complained that a Bloomberg reporter had, while inquiring about a partner’s employment status, pointed out that the partner had not logged onto his Bloomberg terminal lately.

The incident led to broader concerns about the line at Bloomberg between its lucrative terminal business and the hypercompetitive newsroom, threatening to undermine the credibility of both. In a secretive world that thrives on opacity, traders and financial firms jealously guard every speck of information about their activity to avoid tipping their hand on their trades and investments.

“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. He added: “If Bloomberg reporters crossed that line, that’s an issue.”

The news gathering technique appears more widespread than the Goldman incident, which was first reported by The New York Post. A preliminary analysis at Bloomberg revealed that “several hundred” reporters had used the technique, a person briefed on the analysis said. (Bloomberg employs more than 2,400 journalists worldwide. A spokesman declined to comment on the analysis and said no reporters had been fired.)

There are also fears that the monitoring may have gone beyond Wall Street. Banking regulators at the Federal Reserve are examining whether their own employees were subject to tracking by Bloomberg reporters, according to people briefed on the matter.
Although anti-IP types would have you believe that no damage is done when information spreads beyond initial holders of information that simply is not necessarily true, as evidenced by the concern by Wall Street firms that information on their terminals was used by Bloomberg reporters. Information can be very valuable and firms will pay good money to get at it.  Sometimes they will pay good money to just get the information ahead of others.

I am aware of a money manager, back in the old days, who paid a reporter to show up at the headquarters of the Bureau of Labor Statistics in Washington D.C. and grab the employment report before it was published across the wires. Back then, the BLS would release a hard copy of the number to reporters 15 to 30 minutes before it was to be officially released.  LOL, the report would have stamped on it "Embargo, not to be released until x time."  But the reporter on the payroll of the money manager, as soon as he had his copy, would run across  the street in front of the BLS headquarters to Union Station, grab a payphone and call the numbers into the money manager on Wall Street who was waiting for the call so he could put on bond trades ahead of the number being publicly released.

I am also aware, way back when, of a hedge fund-type operator, who would occasionally be tipped off minutes before news came across the Dow Jones wire. I'm not sure, who his source was and it didn't happen often, but when it did, it was valuable information that you could trade for serious $$$.

Anyone that tells you that information is not "scare" and not valuable and gives the impression it is disseminated to the entire world simultaneously has no clue.


  1. Replies
    1. He's great for the libertarian community.

      In my estimation, he helps keep the bar high.

  2. God, I hope they throw that mini-tyrant Bloomberg and all his top level staff in prison for 20 years, take all their ill-gotten gains, and humiliate them for the world to see.


    Just for new readers, here is how Bloompolean got rich.