Dan Doctoroff

Yesterday, Dan Doctoroff CEO of Bloomberg sent a letter to Bloomberg terminal customers outlining the results of two investigations of the company’s data security and journalistic practices. The investigations were triggered by reports in May 2013 that Bloomberg news reporters had access to some subscriber information.

In response to the controversy Bloomberg retained the law firm of Hogan Lovells and the data security and regulatory compliance consulting firm Promontory Financial Group to examine Bloomberg’s client data policies and practices. The 102 page Hogan Lovells/Promontory report also includes the conclusions of Samuel J. Palmisano, the former Chairman and CEO of IBM, who provided advice to the Board of Directors. The full Hogan Lovells/Promontory report on the terminal at RVWS.
Journalistic Standards In addition, they asked, Clark Hoyt, previously Editor-at-Large at Bloomberg News and a former Public Editor of The New York Times, to examine the relationship between Bloomberg’s news and commercial operations. Hoyt conducted interviews across Bloomberg news unit, with clients and experts on journalistic ethics.

A Video Statement from Dan Doctoroff, the letter to customers, and the full reports from HoganLovells/Promontory on security and Hoyt on  journalistic standards are available at
The Hogan Lovells/Promontory report and Mr. Palmisano concluded that Bloomberg has appropriate client data policies and controls in place. Both reports made additional recommendations which Bloomberg chose to voluntarily implement as they were presented.

Doctoroff stated that “our highest priorities are to innovate rapidly, promote transparency and respond quickly to your questions and needs.” But he admitted that Bloomberg leadership did not fully appreciate how growth in both our news and commercial operations necessitated a change in policies and practices.
Growth and Change: From a Data Business to a News Business. One of the aspects of this controversy that intrigued me is rooted in the corporate history of  Bloomberg. Doctoroff tries to put the controversy into this context. Bloomberg didn’t start out as a news organization. The company provided market data. Although he doesn’t explicitly state it — the facts suggest that news reporting be began s a marketing initiative designed  to expand business terminal sales. 

The news division began 23 years ago with a “handful of scrappy journalists ” The division has grown to over 2,000 journalists and reporting has become a more important part of the business terminal offering. The report described how the peculiar origins of the news function at Bloomberg blurred lines between journalism and commerce. Reporters sometimes accompanied terminal sales people on visits to clients and potential clients because they wanted for find out what  type of news subscribers would find useful.

Hoyt concluded that Bloomberg didn’t do enough to reassess the relationship between news and our commercial operations as their news department grew and their business expanded Doctoroff agreed with the assessment: “The fact that we didn’t recognize the sensitivity of journalist access to limited client data represents an example of how our policies did not keep pace with the realities of our growth and evolution.”

Doctoroff’s Concluding Thoughts

“It is clear that we should have been more proactive in considering the evolution of customer data issues as well as the relationship between our news and commercial operations. Personally, I wish I had done more to hasten this evolution, which could have helped to prevent us from making mistakes. That said, I am proud of how our company responded when we became aware of the fact that we needed to change. We acted quickly to give our clients the protection and third party reassurance they deserve.”

Doctoroff letter sums it all up: “Where do we go from here?” As we chart a complex, multifaceted path forward, two simple words come to mind: transparency and innovation. Our ultimate goal is not just to fix today’s issues; it is to set new standards for ourselves and, in doing so, hopefully a higher bar for the entire industry.” 

Customer Response A story in today’s New York TImes reports that the two most outspoken banks regrading Bloomberg;s practices, Goldman Sachs and JPMorgan Chase, expressed satisfaction on Wednesday with Bloomberg’s review.”We appreciate their commitment to safeguarding client data and their willingness to review their practices,” a Goldman spokesman, David Wells, said. Jamie Dimon, the chairman and chief executive of JPMorgan, said that Bloomberg “handled all aspects of the review very well.”

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