So the unsurprising question is, why wouldn't other parts of Bloomberg have access to some/all of this data? And even if everybody was terribly offended by that, what are they going to do? They're pretty much locked in at this point.
Bloomberg are playing with fire here, partly because they're almost a monopoly, and partly because they could be so easily replaced on the quotes side (if not on the financial news market side). Technology has moved on and exchanges are more open with data than they used to be, and this is probably only going to continue - I'm sure they'd love to cut Bloomberg out of the picture and charge their own fees separately.
There is no justification for Bloomberg journalists to be poking into private account information about Bloomberg clients - the potential for abuse of this position is huge, apart from anything else the journalists could use it for insider trading, which is of course illegal. They could also take information from one trader and sell it to a competitor, there is huge scope for abuse, and the only way to avoid it is to have very clear (and tight) boundaries for the usage of stats collected.
In the same way that newspapers have a firewall between editorial and advertisers, to try to stop advertisers influencing editorial, Bloomberg should have a firewall between the division which sells financial information and that which investigates financial news in order to get that information. I find it astonishing that so many people are defending this sort of privacy invasion as standard practice. It's not acceptable to use information such as queries and logins to measure specific individual actions and find out (for example) how active a particular trader has been in a certain market, then spread that information. It's fine to keep these stats and anonymise them in order to generate statistics about usage, but quite another thing to use them to track individuals and trading patterns. If Google for example used the content of private emails from a CEO to target companies to sell adverts to, there would be outrage, and rightly so.
Exchanges charge their own fees in any case which Bloomberg passes on to the end client with no markup, hence they don't really care about the fact that it goes through Bloomberg (in-fact because Bloomberg make it easy to subscribe to new exchanges Bloomberg is probably a net positive for the exchanges).
Insider trading is a risk, but no-more so than with everyone else in the financial industry. If you work in finance typically there's pretty tight restrictions on what you're allowed to trade on a personal account (i.e. no shorting, no holding equities for less than 30 days, etc.) and you have to register any non-blind investments (both so things like insider trading can be tracked but also to prevent conflicts of interest).
Absolutely agree. I think what I was trying to say, and didn't do a good job of it is this, why is it surprising that this kind of data leak exists at Bloomberg? It seems that most of the news reporting is trying to spin this into a mega-scandal, but the financial world is kind of "meh" about the whole thing...at least publicly.
I think it's because they've already accepted the fact that all of their trading data is moving through those terminals and have that reality figured into their mental model of how their business operates. I don't think it's figured into their risk models however.
Bloomberg are playing with fire here, partly because they're almost a monopoly, and partly because they could be so easily replaced on the quotes side (if not on the financial news market side). Technology has moved on and exchanges are more open with data than they used to be, and this is probably only going to continue - I'm sure they'd love to cut Bloomberg out of the picture and charge their own fees separately.
There is no justification for Bloomberg journalists to be poking into private account information about Bloomberg clients - the potential for abuse of this position is huge, apart from anything else the journalists could use it for insider trading, which is of course illegal. They could also take information from one trader and sell it to a competitor, there is huge scope for abuse, and the only way to avoid it is to have very clear (and tight) boundaries for the usage of stats collected.
In the same way that newspapers have a firewall between editorial and advertisers, to try to stop advertisers influencing editorial, Bloomberg should have a firewall between the division which sells financial information and that which investigates financial news in order to get that information. I find it astonishing that so many people are defending this sort of privacy invasion as standard practice. It's not acceptable to use information such as queries and logins to measure specific individual actions and find out (for example) how active a particular trader has been in a certain market, then spread that information. It's fine to keep these stats and anonymise them in order to generate statistics about usage, but quite another thing to use them to track individuals and trading patterns. If Google for example used the content of private emails from a CEO to target companies to sell adverts to, there would be outrage, and rightly so.