This article is from the source 'guardian' and was first published or seen on . It last changed over 40 days ago and won't be checked again for changes.

You can find the current article at its original source at http://www.guardian.co.uk/media/2013/may/14/bloomberg-scandal-trading-emails-shared-online

The article has changed 4 times. There is an RSS feed of changes available.

Version 0 Version 1
Bloomberg hit by new scandal as trading emails are shared online Bloomberg hit by new scandal as trading emails are shared online
(about 1 hour later)
For years, Bloomberg had a public reputation that matched how people working in high finance often saw themselves: fast, ruthless and clever, but fair. A second apology in as many days from Bloomberg News failed to quell the storm around the financial news firm on Wednesday after the Bank of England said it was "reprehensible" that it had allowed its journalists to see data about how clients used its system. 
Now, after a scandal involving the mistreatment of private client information, the mighty financial news and information giant risks being characterised in the same way many outsiders see its banker clients: secretive, sneaky, carelessly risky and breaking the rules. Just days after a Goldman Sachs complaint sparked revelations that Bloomberg reporters had been able to access log-in details at banks and other organisations, the company now faces inquiries from the UK, US, German and European central banks and the US Treasury. 
The financial world, much of which is powered by super-fast terminals run by Bloomberg, was stunned again on Tuesday after news emerged of a leak of confidential client information. The firm's chief executive issued a new apology – the company's second such act of contrition in just two days. "The protection of confidential information is vital here at the bank. What seems to have happened at Bloomberg is reprehensible," a Bank of England spokesman said. "Bank officials are in close contact with Bloomberg who have provided assurances to ensure that this does not happen again. We will also be liaising with other central banks on this matter."
The news came just days after it was revealed that Bloomberg reporters had been able to access log-in details at banks and other organisations. The story, which was sparked by a Goldman Sachs complaint, saw editor-in-chief Matthew Winkler apologise on Monday. But any hopes that Winkler had put the story behind the firm were quickly dashed. On Tuesday, the Financial Times reported that a long list of private Bloomberg messages between banking traders and their clients had been posted online. The bank's intervention came after Bloomberg chief executive Daniel Doctoroff published a statement on the firm's website saying he and his team had personally contacted more than 300 clients in a remarkable act of apology and reassurance that its reporters did not have access to anything too sensitive. "We started each conversation with an apology for our mistake. We've listened carefully and also explained the very specific and limited nature of the data our reporters were able to access," he said.
The FT said that the messages showed price information, email addresses and Bloomberg user names, among other data. It is believed that the data, which had been collected as part of a client project for Bloomberg, was accidentally published on the public internet when it had been meant to be stored on a secure site. The FT said that once it inquired about the lists, they were taken down. That apology within 24 hours of one from editor in chief Matthew Winkler on Monday in which he said it had been the practice since the 1990s for reporters to have access to log-in data because they went to clients to ask what topics they wanted to see covered. He said the company had made changes to reporters' access.
But, he said: "The appearance of impropriety can be as damaging to a reputation as doing something improper. Because we hold others accountable for disclosure, we expect the same of ourselves."
But any hopes that Winkler had put the story behind the firm had been quickly dashed when the Financial Times reported that a long list of private Bloomberg messages between banking traders and their clients had been posted online.
The FT said that the messages showed price information, email addresses and Bloomberg usernames, among other data. It is believed that the data, which had been collected as part of a client project for Bloomberg, was accidentally published on the internet when it had been meant to be stored on a secure site. The FT said that once it inquired about the lists, they were taken down.
A Bloomberg spokesman said: "This work was done with client consent, where emails were explicitly forwarded to us to a dedicated email account and released by the person responsible for the email so that we could conduct internal testing to improve our technology for the client."A Bloomberg spokesman said: "This work was done with client consent, where emails were explicitly forwarded to us to a dedicated email account and released by the person responsible for the email so that we could conduct internal testing to improve our technology for the client."
But the seriousness with which the firm is taking the potential damage to its business by the series of gaffes was illustrated by a public apology by its chief executive, Daniel Doctoroff. In a statement on the firm's website, Doctoroff said he and his team had personally reached out to more than 300 clients in a remarkable act of apology and reassurance that its reporters did not have access to anything too sensitive. "We started each conversation with an apology for our mistake. We've listened carefully and also explained the very specific and limited nature of the data our reporters were able to access," he said. The firm's motivation in seeking to placate its outraged clients is obvious: the company's $20,000-a-year terminals are the heart of the firm's business model. They dominate trading floors and financial institutions all over the world, allowing users super-fast access to a vast array of news and data while reaping the firm billions of dollars in revenue.
Bloomberg's motivation in seeking to placate its outraged clients is obvious: the terminals are the heart of the firm's business model. They dominate trading floors and financial institutions all over the world, allowing users super-fast access to a vast array of news and data while reaping billions of dollars in revenue. The firm charges around $20,000 a year for each terminal – a hefty sum that the overwhelming majority of traders think is more than worth it. Doctoroff posted his personal email on the website and invited the firm's 315,000 subscribers to contact him. "Let me re-emphasize that our company's core value of openness and client trust are our highest priorities and the cornerstone of our business. We will do everything possible to ensure the integrity and confidentiality of our clients' data in all situations and at all times," he said.
Doctoroff posted his personal email on the website and invited the firm's 315,000 subscribers to contact him. "Let me re-emphasize that our company's core value of openness and client trust are our highest priorities and the cornerstone of our business," he said. "We will do everything possible to ensure the integrity and confidentiality of our clients' data in all situations and at all times." He also detailed the steps the firm had taken since the first scandal broke which included limiting its reporters' access to client information to only the publicly available data and appointing a compliance officer reporting directly to him.
He also detailed the steps the firm had taken since the first scandal broke, which included limiting reporters' access to client information to only the publicly available data and appointing a compliance officer reporting directly to him. Those steps came after the initial revelations sent ripples of shock through the financial world when bankers learned that journalists had been trained to use terminal information and to view knowing subscribers' details as a competitive edge in news gathering. 
Those steps came after the initial revelations that Bloomberg reporters had access to some aspects of clients' accounts. Journalists were trained to use terminal information and to view knowing subscribers' details as a competitive edge in news gathering. In his apology, Winkler said: "Since the 1990s, some reporters have used the terminal to obtain … 'mundane' facts such as log-on information." But he went on to say the practice had been stopped to avoid "even the appearance of impropriety". The scandal has tarnished a company and service previously seen as virtually spotless and an integral part of any serious player on Wall Street. "I think people have been really shocked by this," said one Wall Street executive.
The news struck major banks and hugely powerful institutions alike. On Monday, the European Central Bank and Germany's Bundesbank contacted Bloomberg to assess potential breaches. "Our experts are in close contact with Bloomberg," an ECB spokesman said. The Bank of England said on Wednesday that it was "reprehensible" that Bloomberg News had allowed its journalists to see data about how clients used its system. "These things come with a boilerplate confidentiality clause. I'm pretty sure that's been violated and you can bet everyone's taking a closer look at them."
/>He added that it was bad enough that reporters had been checking on who was at their desk and who wasn't using the terminals. But he added that there were larger concerns about the extent of the intrusion.
There is little doubt that the scandals have tarnished a company and service previously seen as virtually spotless and an integral part of any serious, or even not so serious, player on Wall Street. "I think people have been really shocked by this," said one Wall Street executive. "These things come with a boilerplate confidentiality clause. I'm pretty sure that's been violated and you can bet everyone's taking a closer look at them." "There's a lot of data being generated by a lot of important people here. Who knows really what was being looked at?"
He added that it was bad enough that reporters had been checking on who was at their desk and who wasn't using the terminals. But he said that there were larger concerns about the extent of the intrusion: "There's a lot of data being generated by a lot of important people here. Who knows really what was being looked at?" Wall Street bankers said they were unlikely to take a public stand now that Goldman had made the scandal public. In the meantime some said they would try to negotiate deep discounts on the terminals and were waiting with interest to see what regulators on both sides of the Atlantic uncover.
Wall Street bankers said they were unlikely to take a public stand now that Goldman had made the scandal public. In the meantime, some said they would try to negotiate deep discounts on the terminals and were waiting with interest to see what regulators on both sides of the Atlantic uncover.