It’s not often that something happens on Wall Street that should and
could make news but gets mentioned casually in passing instead of being thoroughly
investigated. But that seems to have happened in the reporting about the latest
accusations leveled at Bloomberg financial data and news by public relation
chiefs Jake Siewert of Goldman Sachs and Joe Evangelista of JP Morgan Chase.
The accusations are that Bloomberg reporters have been crossing the line
drawn in the contract that states they may not use information gleaned from the
terminals for reporting. Accusations surfaced when a Bloomberg reporter noticed
that a Goldman executive hadn’t logged in for a few days. He called the Hong
Kong office to ask what had happened to the executive. When news of it got to
Siewert he called Evangelista, who said the same thing had been happening to JP
Morgan’s execs.
Bloomberg investigated, admitted that reporters were crossing the line
and breaching the terminals contract and agreed to put a stop to it. One would
imagine lawsuits and huge press would have ensued but nothing seems to have really
happened. It’s a bit of a damp squib, news-wise.
What hasn’t been explained is that the contract allowed reporters a
limited period during which they could access help desks and log ins. If they
couldn’t use that information why were they allowed to access it?
Much more interesting, though, is that this isn’t the first time
executives have complained about reporters crossing the line. So when Siewert
took the latest complaint seriously, some executives – reported on by the New
York Times on condition of anonymity – admitted to having tried to use the
breach to bargain down the price of the terminals! It’s blackmail. Soft
blackmail, maybe, no threats, no bad guys, no anonymous notes, but blackmail
nevertheless. In a country where people sue for the most tenuous reasons and
even win, that nothing came of this is pretty extraordinary. Honor amongst
thieves, I guess.
That anybody in Wall Street would be accusing anybody else of crossing
the line is amusing. That execs would even openly admit to indulging in
blackmail is testament to how much Wall Street believes itself to be above the
law. That’s still amusing but in a rather sinister kind of way.
What’s puzzling is that these two aspects of the same company exist as bedfellows.
There are many complaints that Bloomberg News reports destructively on Wall
Street goings on, yet Bloomberg financial data terminals are everywhere. And
this despite that they’re by far the most expensive at $20,000 apiece.
Maybe it’s explained by the fact that Bloomberg News is part of Bloomberg
L.P., a multinational mass media limited partnership that’s based in the city
of New York. Revenue in 2011 was $7.6 billion. Global revenue for the financial
data market was $16 billion. No wonder nobody really challenges Bloomberg. And
with all those connections, why would they have to bother reducing the price of
their terminals? For once Wall Street is on the receiving end. Of a corporation
that probably controls Wall Street. Which
pretty much boils down to one man. Michael Bloomberg, the 7th wealthiest man in the US, owns 88% of Bloomberg L.P.
