Big banks are urging Bloomberg LP, which is probing a privacy breach, to focus on whether employees engaged in “scraping” and other data-mining practices.
Financial firms are concerned that Bloomberg is combing through client information for pricing and trade details that could be used to bolster Bloomberg’s competing financial products, according to a source.
Bloomberg is currently in the process of conducting an internal review after Goldman Sachs raised concerns that reporters had used the company’s ubiquitous financial terminals to spy on traders.
An even bigger fear among the banks is that Bloomberg is moving to compete directly with them by leveraging terminal data to expand into trading, asset management and other areas that have been Wall Street’s domain.
For instance, one area of particular concern is Bloomberg’s push to get into the clearing of swaps and derivatives products.
“They are position themselves to be a part of clearing,” said one bank official. “It’s just an interesting position for a news organization to be a part of.”
But lately Bloomberg seems to be pulling back. For instance, the company is shutting down Bloomberg Black, a wealth management product it was aiming to offer to institutional clients, shortly after launching it.
Bloomberg terminals are widely used on trading floors, with more than 315,000 subscribers paying $20,000 for access.
So far, Bloomberg has found no evidence that reporters used the terminals to unearth more than general log-in information about subscribers, according to sources.
The Wall Street Journal reported last week that New York Attorney General Eric Schneiderman had launched an informal probe of Bloomberg’s practices in the wake of the trading breach.