Bloomberg falls victim to speed-journalism

Bloomberg speed journalism

In 2012, I was stunned to hear an official of Deloitte place all his faith in the internal firewalls that he had constructed in the CPA firm to inhibit the exploitation of the conflict of interest that exists between the auditing and consulting divisions. A year later, Matt Winkler of Bloomberg apologized because reporters in the news division had used clients’ proprietary information from the Bloomberg terminals to report financial news stories before other news organizations. The firewall between selling terminals and reporting news had not been sufficient to prevent exploitation of the conflict of interest. There is a lesson here for any multi-divisional company or bank that is relying on firewalls.

The New York Times reported in May 2013 that reporters at Bloomberg News had been “trained to use a function on the company’s financial data terminals that allowed [the journalists] to view subscribers’ contact information, and, in some cases, monitor login activity in order to advance news coverage.”

Even though Bloomberg News is a separate division at the company founded by Michael Bloomberg, who went on to be mayor of New York City, reporters were “nonetheless told to use the terminals to get an edge in the competitive world of financial journalism where every second counts.” The journalists’ training “included informal tips on how to use a function called UUID to locate sources who were also subscribers.” In terms of understanding why internal firewalls are insufficient to prevent the exploitation of structural conflicts of interest for gain, the mention of “informal tips” is significant.

The overcoming of the walls can be “informal,” and thus beyond the radar screens of the firewalls’ enforcers. It need not be that a company official of sufficient rank over both divisions involved in a conflict of interest sanctions one side to jump over. The people on one side can seep through the semi-porous walls informally, and thus without prodding.

Simply stated, some journalists at Bloomberg News “favored breaking news over strict subscriber confidentiality.” Those journalists, not being based in the division selling terminal subscriptions, had little regard for the subscribers, or at least less regard for them than being the first to break a news story.

Like speed-trading, the focus on breaking news at Bloomberg News has been oriented to splicing seconds to gain an advantage over the competition. Whereas the speed-trades are at the expense of individual investors who do not have access to the technology, the “speed-journalism” at Bloomberg has been at the expense of the customers who were subscribing to the company’s financial-information terminals. This is ironic because the news division at Bloomberg had been established to increase terminal subscriptions.

* Read more here, on The Worden Report.


About the Author

The Corner
The Corner has a team of on-the-ground reporters in capital cities ranging from New York to Beijing. Their stories are edited by the teams at the Spanish magazine Consejeros (for members of companies’ boards of directors) and at the stock market news site Consenso Del Mercado (market consensus). They have worked in economics and communication for over 25 years.

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