Cyrus Sanati of Fortune writes about how the Wall Street bankers and traders who are the core Bloomberg customers are more worried about how some of their private messages using the company terminal made it on the Internet than they are about Bloomberg reporters using the terminal to snoop on them.
Sanati writes, “The bulk of the traders and bankers Fortune spoke to over the weekend concerning this story said that the snooping scandal had become more important to journalists than the greater financial community.
“But then came word Monday that a trove of Bloomberg messaging data had been found online. The data was old, but contained user info, trading data and sensitive communications between bankers, traders and their clients. Bloomberg messenger is an email and instant messaging program. A great deal of trading and price discovery goes on in these chats — especially in the opaque over-the-counter market. It is where essentially large parts of the financial industry conduct the bulk of their business. Bids and offers are sent between brokers and buy side professionals and deals are sealed all on Bloomberg chat. Bloomberg actively scans messages to help their customers seemingly keep records of their bids and offers.
“‘They have a system to capture your broker runs in Bloomberg and feed through into Excel,’ one fixed income trader told Fortune. ‘These runs come in every two seconds so it’s a priceless tool for us.’
“Bloomberg employs an army of ‘message mining analysts’ who, according to a recent job placement advertisement picked up by the Financial Times, ‘are responsible for ensuring that price information across Bonds, CDS, Loans and Mortgage products are properly picked up from individual messages and returned back to the client.’
“The key here is ‘returned back to the client.’ But with the cache of messages that were recently found online, some traders are concerned that their data isn’t being handled properly and could fall into the wrong hands. There is also concern that the company may be using that information to help Bloomberg Tradebook or Bloomberg Pool, the company’s growing broker-dealer and dark pool trading outfits, to gain an informational advantage over the clients.”
Read more here.
