In case you missed it, let me clue you in: Bloomberg reporters got caught snooping on the Bloomberg terminal usage (well, mostly login info) of their (overpaying) customers.
So not only do you have to pay well over $20,000 per year, you also get the privelage of being snooped on by reporters, looking for scoops.
What happened lately was when a Hong Kong-based Bloomberg reporter contacted Goldman Sachs (which coincidentally might be Bloomberg’s top 3 biggest customer), and casually asked why a certain executive had not had any «terminal activity» lately - an indication he was no longer working for the firm.
That promted Goldman to complain to Bloomberg and eventually the story got leaked to The New York Times, which caused a huge shitstorm (mostly on CNBC and Reuters, both celebrating the misfortune of their biggest competitors).
The choice by Bloomberg to let reporters get login info of high profile users (they might have snooped on Bernanke, the Fed suspects), is incredibly poor judgement - both journalistically and business-wise, but it is also kind of funny to consider who made the complaint.
Goldman.
Goldman was pissed that Bloomberg potentially could frontrun news events (one of the events was the outing of Bruno Iksil as the London Whale at JPMorgan), much in the same way as Goldman Sachs in the past has been the front runner.
It is no secret that a majority of banks have used customer information to trade on, but we have few on-record examples of this. Luckily I have one handy.
Back in 1998, Long Term Capital Managment (LTCM) was about to collapse and they were frantically trying to get out of their positions. They called everyone. One of these calls went to Goldman Sachs, who sent guys over to do a due dilligence on LTCM’s books.
Goldman Sachs then proceeded to download LTCM’s entire book on to a laptop and went back to the office and traded against the fund (with huge profits).
How do we know this? Cause LTCM employee Jim Rikards told me:
In closing, Bloomberg did a very bad thing and customers who are already fed up with paying out of the nose for Bloomberg terminals, might start considering alternatives (Infront Trader is pretty damn good, by the way - and at a fraction of the price), but what they did was merely what banks have been doing for years.
Front running.