PEAN regulators vowed to investigate potential privacy breaches at Bloomberg yesterday, as the row over how it uses client data escalated.
The European Central Bank (ECB) and Germany’s Bundesbank have joined the Federal Reserve and US Treasury in closing ranks around the financial agency, as regulators try to find out whether their own staff and data have been affected.
Furious bankers have also lashed out at the security failings at Bloomberg, arguing that if finance firms committed a similar breach of the rules they would be hit hard by regulators and heads would roll.
“The only reason Bloomberg issued their mealy-mouthed apology is that a) they have potential liability from data protection breach and b) we’d all get rid of Bloomberg terminals and install Reuters,” said one investment banker. “Banks have much more robust Chinese walls than Bloomberg. If we committed such a breach, there would be firings, regulatory action, inquisition. Here with Bloomberg you get no disciplinary action for a blatant misuse of client info.”
“We will have to look at exactly what reporters could access, and we will be checking up with Bloomberg to make sure they do follow through and close this down as they said they will,” said another banking source.
Bloomberg’s editor-in-chief apologised for the errors, saying reporters should never have had access to the information and that internal policies have been updated to ban the practice.
“Our reporters should not have access to any data considered proprietary. I am sorry they did. The error is inexcusable,” said Matthew Winkler.
The data service came under fire last week after it emerged reporters may have had access to users’ login details, functions and help desk inquiries.
But a bigger worry for Bloomberg may now be regulators’ interest.
“The ECB takes the protection of confidentiality in the usage of data products by ECB management and staff very seriously,” said a spokesperson for the bank yesterday.
“Our experts are in close contact with Bloomberg.”
PROFILE: BLOOMBERG’S EDITOR IN CHIEF
MATTHEW Winkler, the always bow-tied editor-in-chief of Bloomberg News, is a stickler for writing style. The near 2,000 journalists and editors at Bloomberg need little reminding that he’s banned words like “but” and “however” from their work.
Some say his fanatical approach to the use of words make Bloomberg what it is – a trusted and invaluable source of financial information. Others, many of whom worked for Bloomberg at one stage in their career before going on to somewhere else, says the rigidity takes away all the creativity. There were certainly no buts or howevers among the words Winkler penned yesterday to express his position on the suggestions that Bloomberg journalists had improperly used information they had derived about their clients to write stories about them. “Our reporters should not have access to any data considered proprietary. I am sorry they did. The error is inexcusable,” Winkler wrote in an apology he hopes will head off further repercussions for the financial news group. Winkler, who is in his late fifties, founded Bloomberg News in 1990 with Michael Bloomberg, who is now governor of New York. Bloomberg News is a two-time Pulitzer Prize finalist and received more than 500 awards, but Winkler himself has never won the Pulitzer Prize, something he still aspires to. Winkler has defined the Bloomberg style of journalism, which is very factual, and has little room for colour or tonality. He is the author of The Bloomberg Way: A Guide for Reporters and Editors, a required reading book for all aspiring Bloombergers. He’ll need to use all his skills of persuasion in the weeks ahead to restore relations with the firm’s crucial client base.