The magical, $20,000-a-year financial services machines known as Bloomberg LP terminals are everywhere on Wall Street, for better or worse. Along with the constant stream of market information, the terminals apparently provided a window into the workings of their users for Bloomberg's 1,000-plus army of journalists, according to allegations from Goldman Sachs and JP Morgan. The New York Post reported, "a Bloomberg reporter asked a Goldman executive if a partner at the bank had recently left the firm — noting casually that he hadn't logged into his Bloomberg terminal in some time … Goldman later learned that Bloomberg staffers could determine not only which of its employees had logged into Bloomberg's proprietary terminals but how many times they had used particular functions." In other words, the companies were paying for the pleasure of being watched.
A follow-up by the Financial Times reported that JP.Morgan claimed terminal-snooping was behind Bloomberg's scoop on the firm's "London Whale" debacle. Bloomberg, while not addressing the specific complaints, said, "In light of [Goldman's] concern as well as a general heightened sensitivity to data access, we decided to disable journalist access to this customer relationship information for all clients."
The high-profile embarrassment, which pissed off some of the company's most valued clients, demonstrates the risks of providing technology to (and making millions off of) some of the very same people the reporters on staff are tasked with covering. A concerned employee of a large trading firm that uses Bloomberg terminals told Daily Intelligencer, "You can bet that all institutions, especially on the sell side and investment banking side, are reviewing their information security and have questions for Bloomberg regarding the now-supposedly-disabled functionality exploited by Bloomberg reporters, and whether there were/are any other vulnerabilities Bloomberg should tell them about."
Another Wall Street source told Gawker that Bloomberg is "a paranoid nanny company where absolutely everything is logged. Anyone who uses a Bloomberg [terminal] should assume they have no privacy. Bloomberg tracks everything from what stories people read to what pages they click on. Some of this is to improve the user experience, but some of it is just spying, which they can do as part of their contract."
And it wasn't all business, Quartz added:
Several former Bloomberg employees say colleagues would look upchat transcripts of famous customers, like Alan Greenspan, for amusement on slow workdays. The transcripts were typically mundane and hardly incriminating, but who wouldn’t enjoy watching a former US Federal Reserve chairman struggle to use a computer?
For now, the fun is over, but the fallout may not be.