As errors continue to mount at Bloomberg News, the question isn't just whose heads will roll, but from how high up on the org chart. The financial newswire avoided cratering Apple Inc stock with its premature Steve Jobs obituary last month because markets had been closed for half an hour by the time the false item was published. Bloomberg's incorrect report stating Sarah Palin had been arrested for drunk driving 22 years ago garnered little notice before it was corrected. But now Bloomberg has done some real damage. It incorrectly flashed a headline to terminals Monday stating United Airlines had filed for a second bankruptcy, sending shares to $3 from $12 and wiping out close to $1 billion in stock market valuation. After a halt in trading, the stock recovered to $11 by the end of the day. But the damage to both investors and to Bloomberg's reputation has been done. It hardly helps that the incorrect news bubbled up through a bizarre series of events:
- A reporter at Income Securities Advisors was Googling for routine bankruptcy information and came across an old Chicago Tribune article about United's 2002 bankruptcy.
- The article, however, was posted on the website of the South Florida Sun-Sentinel with a fresh date and a map of Hurricane Ike, making it appear new.
- The article was linked in a summary of bankruptcy filings on Income Securities's page on Bloomberg.
- Bloomberg sent out an incorrect headline noticing the bankruptcy.
The Times coverage makes it sound like Bloomberg proactively published the news, rather than just carrying the Income Securities item passively.
UPDATE: The Wall Street Journal shed light on this issue:
The Income Securities report was made available to Bloomberg users as part of the content provided from a variety of news services, Web sites, blogs and other sources, a Bloomberg spokeswoman confirmed. She said Bloomberg's own news service didn't pick up the article.
For reporters in the Bloomberg's high-pressure newsroom, being late on a story is shameful in much the same way being incorrect is shameful. Through relentless and well-documented indifference to the humanity of its own staff, the wire service may have simply frayed nerves to the point where such errors have become inevitable.
But the opposite is also possible. Perhaps it takes a tyrant to keep a machine like Bloomberg running properly, and it is the softening influence of Norman Pearlstine, veteran of the comparatively sleepy world of Time Inc. magazines, that has undermined the financial wire's credibility.
Bloomberg preeminent tyrant (and Pearlstein predecessor) Matthew Winkler would not doubt frame it that way. But is it so? Our ears are open.