The Terminals Have Eyes! Bloomberg Busted for Spying on Goldman Sachs
What if the privacy breach that exposes the inner workings of Wall Street didn't come from hackers or careless inside traders, but rather from the machines that undergird the finance sector's entire operation? The New York Post reports that Goldman Sachs is up in arms with Bloomberg LP after it found Bloomberg reporters using Bloomberg terminals to track employee activity at the investment firm.
The jig was up after a journalist started asking questions based on how often a Goldman exec used his terminal, says the Post:
In one instance, 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, sources added.
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, insiders said.
The whole thing sounds like the News of the World scandal, except if the targets were paying Rupert Murdoch $20,000 for the privilege. That's the annual "rent" Wall Street forks over for each terminal.
A source in finance who works with the terminals told Gawker that the breach shouldn't come as a surprise:
[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.
No reporters lost their job as a result of Goldman's complaints. And Bloomberg assured the investment firm that it "pulled the plug on the function that allowed its reporters to snoop" within 24 hours of being notified, says the Post. (The function in question was a feature for managing relationships with customers, "a holdover from that ’90s era when reporters also worked with the news organizations sales efforts.")
On the other hand, leaking a privacy scandal sounds like a great way to get a discount on that $20,000 fee.
Update: It wasn't just Goldman Sachs. Multiple publications, including the Financial Times, are reporting that JPMorgan also raised concerns with Bloomberg News about reporters using "private client information on the terminal" to inform their stories, including Bloomberg breaking news about the "London Whale."
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