A high-ranking newsroom official for Bloomberg News was ordered last year to cut off reporters' access to information about how clients used the company's information terminals, according to a former Bloomberg reporter, but the spying continued anyway. The order followed complaints from JPMorgan Chase that Bloomberg reporters had used JPMorgan's terminal-use records to break stories about the "London Whale” trading debacle, which led to more than $6 billion in losses for the company.
At the time, Bloomberg anchor Erik Shatzker had openly commented on-air about using terminal data to track subjects in the story, as Buzzfeed reported Saturday. But unlike Bloomberg's surveillance of Goldman Sachs, which blew up into a scandal last week, the JPMorgan episode passed quietly.
"JPMChase raised it with Bloomberg," the former reporter wrote to Gawker, "but unlike Goldman, did not make a big deal out of it. (They had other problems at the time[.])"
A JPMorgan source clarified that the bank never lodged a formal complaint with Bloomberg’s business side at the time. Rather, they complained to the reporters directly. The source said that for the past year, Bloomberg News journalists had been “very openly telling us how often someone had logged in, and trying to track disciplinary actions based on that.”
“They would call us and say Bruno [Iskil, the so-called “London Whale”] hasn’t logged in and a few days.” It wasn’t just regarding the chief investment office, the unit responsible for the disastrous trades. Reporters were also tipped off to potential departures in JPMorgan’s fixed income and equity divisions by tracking the last time an executive logged in.
According to the JPMorgan source, the response from reporters was that they were “allowed to do that.” Only after the news broke Friday did JPMorgan realize reporters had enjoyed access to data beyond just whether someone logged into the terminal.
The former Bloomberg reporter, who requested anonymity, said that some executive editors had condoned the use of clients' terminal data as part of the reporting process, driven by editor-in-chief Matthew Winkler's "Faster, Pussycat! Kill! Kill! directive." It "was ongoing for a long time," the source wrote. "Some people there frowned on it, others thought it was needed to keep Winkler happy."
The order to cut off the terminal access came from an unknown higher-up authority, according to the ex-reporter, and was given to Bloomberg News chief of staff Reto Gregori. Gregori, the source wrote, "was supposed to take care of it and he fucked up. He fucked up by not taking care of it once it was brought to his (and Winkler's) attention."
Bloomberg reporters had also used terminal data, the ex-reporter said, to discover that former UBS trader Kweku M. Adoboli—who was sentenced to seven years in prison last year for fraud that prompted a multibillion trading loss—had left UBS.
Another source familiar with Bloomberg News said that Winkler himself would encourage reporters to use the function on the terminal to see when certain senior executives were frequently checking job listings.
“This practice was not new at all and I am surprised it took this long for an issue to be raised,” a former Bloomberg News editor told Gawker.
The ex-reporter called Bloomberg's official response to the Goldman Sachs controversy "crafty," for implying that executives had cut off the spying as soon as they'd become aware of any customer complaint. And one part of the statement from Bloomberg LP CEO Dan Doctoroff, a deputy mayor under Michael Bloomberg, was particularly misleading, the source said: "Doctoroff claimed that reporters were unable to see which news stories clients read. It's true that a reporter couldn't go through a client's profile to check an individual's reading list."
"BUT," the source added, "the 2 function allows editors to look at a particular story and see how many people, and who read or emailed it. So you couldn't search to see what Steve Cohen read, but you could pick a story and see who read it."
Neither Bloomberg News nor Gregori returned request for comment.
Update 7.12pm: Bloomberg News spokesperson Ty Trippet said that the order to cut off reporter access was made after Erik Shatzker mentioned the practice on on-air. But Trippet placed the responsibility with the business side, rather than with Bloomberg News' chief-of-staff:
Reto Gregori was not responsible for making this change. Executives on the business side were asked to change reporter access but the request fell through the cracks.
Trippet later added: "Bloomberg has no record of a complaint from JPMorgan on this issue."
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