Bloomberg Fixer Quit Days Before Spy Scandal Broke
Just before scandal broke about Bloomberg reporters using private data from the company's ubiquitous terminals, Charles Glasser, an in-house lawyer responsible for training editors and reporters at Bloomberg News, announced his departure after 12 years with the company.
In an email to colleagues sent Monday morning, reprinted by Talking Biz News, Glasser, 55, wrote:
. . . it’s time for me for pay more attention to myself. I have no long-term plans at the moment . . .
Last November, in an essay entitled "Where Was Jack Welch's Charles Glasser?" Bloomberg News editor-at-large Tom Keene called Glasser "Bloomberg News' resident pit-bull terrier":
Glasser is also very good at developing and defining the need for “question marks.”I cannot calculate the number of times Attorney Glasser has saved me from digital idiocy. (As one small example, his lecture, and I mean lecture, on how the Media should and must handle impending corporate bankruptcy still rings in my ears.)Each and every moment of my digital life is knowing that one dumb “tweet” could destroy me.Charles Glasser whispers to me 24/7.
Glasser officially left on May 1st. In the New York Post story that kicked off the debate about whether clients were unfairly spied on came out on May 10th. In it, the paper says Goldman Sachs had been meeting face-to-face with top brass at Bloomberg News about the issue "in recent weeks." According to a source Goldman initially complained in early April and Glasser was not present for the meetings.
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Bloomberg's Textbook Response To The Snooping Scandal
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They say the best crisis communications plan is the one that you never need to take off the shelf, but Bloomberg ’s recent reaction to questionable data and privacy policies may be a very close second.
Over the course of a 20-plus year communications career, I’ve had an excellent vantage point from which to witness crisis situations that were handled exceptionally well and some that did not go exactly as planned. While I am normally glued to what seems to be the media’s “movie of the week,” commentary on never-ending corporate blunders and botched responses, it is refreshing to be able to sit back and applaud a textbook response that was equal parts preparation and accountability.
By now the details of what is being dubbed the “Snooping Scandal” have been widely reported and its ramifications adequately (over)analyzed by mainstream and financial news media. Although it is likely that its media competitors and other navel gazers may extend the news cycle further than it deserves, don’t expect this week’s events to put a chink in the armor of Bloomberg’s media or terminal businesses for the long term.
Bloomberg wasted no time in delivering a swift, decisive and very “on brand” response hours after the news broke. Internal communications to staff conveniently became public while clients and media were addressed with the appropriate level of humility and contrition. The company also leveraged its own media assets to ensure that the message could be controlled in its favor, a luxury very few of corporations have.
Kudos to CEO Daniel Doctoroff for stepping in front of the curtain via Bloomberg’s website with an admission and assurance that the issue had been resolved while Bloomberg News’ exacting editor-in-chief Matthew Winkler, who is one of the most respected journalists in the world, reinforced Doctoroff’s communication by reiterating company policies through an op-ed and address at a global editorial meeting. This added another much-needed layer of transparency to the breach of privacy and assurance that the matter was not being taken lightly.
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What Bloomberg’s Snooping Scandal Says About Wall Street’s Culture
A Bloomberg terminal displays news on the floor of the New York Stock Exchange in New York City, on May 13, 2013.
On Wall Street, it’s all about finding an edge — no matter how small or seemingly insignificant. Whether it’s a snippet of chatter in a restaurant, a stray comment on the squash court, or a scrap of barroom banter after work, Wall Street traders are constantly on the hunt for nuggets of information they can use to gain advantage over rivals. Because success on Wall Street is often measured in seconds, access to information equals money. That mentality also applies to the hypercompetitive world of financial journalism, as the unfolding Bloomberg snooping scandal demonstrates. With its wide-open office layout packed with shirt-sleeved employees hunched over banks of flickering data terminals, Bloomberg’s newsroom looks like a take-no-prisoners Wall Street trading floor. Apparently, it has been acting like one as well.
For two decades, reporters at Bloomberg News have been using special access to Bloomberg’s ubiquitous financial data terminals to glean sensitive — and potentially proprietary — information about Wall Street banks, hedge funds, and possibly even financial regulators, according to multiple reports. The blockbuster disclosure, first reported by the New York Post, has pulled back the veil on the cozy relationship between the company’s financial-data service and news-gathering divisions, and could undermine the reputation and client trust it has built over three decades since its founding by Michael Bloomberg, currently mayor of New York City.
Regulators at the U.S. Federal Reserve and Treasury Department — where Bloomberg terminals are widely used — are investigating whether any of their confidential data has been misused, according to Reuters, and the European Central Bank said it was in “close contact with Bloomberg” about any possible data breaches. As if that wasn’t enough, the Financial Times reported late Monday that in an apparently unrelated incident, more than 10,000 private messages between Bloomberg clients in 2009 and 2010 containing “confidential financial price information and trading activity” had been accidentally leaked online.
The Bloomberg data scandal erupted after Goldman Sachs complained last month that a Bloomberg News reporter had called the bank to ask about a partner’s employment status after apparently tracking the executive’s activity — or lack thereof — on a Bloomberg terminal. Bloomberg has more than 315,000 terminal subscribers around the world, including at virtually every major investment bank, hedge fund, private-equity firm, and institution or regulatory agency that closely tracks financial markets. Each terminal subscription costs about $20,000 per year, and that revenue constitutes about 85% of the nearly $8 billion in sales that Bloomberg posted last year.
Each Bloomberg News journalist has access to a terminal, and was encouraged to “harness” its power to find sources or otherwise bolster his or her reporting, as part of Bloomberg’s hard-charging approach to news gathering. Terminal access has long been a sore spot for the company’s rivals, including Reuters and Dow Jones, which compete against Bloomberg as both providers of financial data and news-gathering operations. Because financial journalism is so fast-paced and data-driven, Bloomberg journalists’ special access could have given them an advantage over their competitors. Needless to say, it was hard not to detect a dose of schadenfreude as Bloomberg’s rivals pounced on the story.
Using their terminals, Bloomberg reporters could see a client’s contact information, login history, information about help-desk inquires and other “high-level types of user functions.” Reporters could see whether a client was examining stocks or bonds, but could not see not specific trades. The access was originally designed to allow Bloomberg’s sales teams to tailor service to clients more effectively, but apparently it had been extended to journalists as far back as the 1990s.
Meanwhile, Matthew Winkler, editor in chief of Bloomberg News, apologized for allowing journalists “limited” access to sensitive financial data about the company’s clients. “Our reporters should not have access to any data considered proprietary,” Winkler wrote in an editorial posted on Bloomberg’s website. “I am sorry they did. The error is inexcusable. Last month, we immediately changed our policy so that reporters now have no greater access to information than our customers have. Removing this access will have no effect on Bloomberg news-gathering.”
Bloomberg terminals have become such a vital and ubiquitous tool on Wall Street that it’s unlikely that the company will face a massive client exodus, especially given the fact that Bloomberg will presumably be extremely sensitive about data security moving forward. Still, many on Wall Street were not amused by the episode, and it’s clear that Bloomberg’s reputation has taken a hit.
