More Clients Ask Questions of Bloomberg

Fallout From Snooping Controversy: Amy Chozick of The New York Times and Tom Lowry of CNBC Digital discuss on CNBC that reporters for Bloomberg News used the company’s terminals to monitor subscribers’ use.

With new concerns emerging about practices at its news division, Bloomberg L.P., the sprawling financial services company founded by Michael R. Bloomberg, scrambled to shield its lucrative terminal business and appease nervous customers.

The report on Friday that a Bloomberg reporter had used the company’s financial data terminals to monitor a Goldman Sachs partner’s logon activity has set off a ripple effect of inquiries from other worried subscribers, including JPMorgan Chase, Deutsche Bank, the Federal Reserve, the Department of Treasury and the European Central Bank.

The revelations now stretch back to 2011, when UBS complained after a Bloomberg Television host alluded on air to his monitoring of the London-based rogue UBS trader Kweku Adoboli’s terminal logon information to confirm his employment status at the bank. Then, last summer, executives at JPMorgan Chase questioned Bloomberg reporters’ techniques after they were first to report on the trader Bruno Iksil, nicknamed the London Whale.

The fallout continued on Monday. Bloomberg has now received about 20 inquiries about whether reporting practices violated the company’s polices about getting access to subscriber information, including one from Bank of America. The bank also contacted Bloomberg to raise questions about the security of its employees’ private information, people briefed on the matter said.

Citigroup and other Wall Street banks have also reached out to Bloomberg in recent days, according to these people who would not be identified discussing confidential conversations. The banks all declined to comment. In response, the company has been reaching out to subscribers. As of Monday, Bloomberg L.P.’s top executives, including the chief executive, Daniel L. Doctoroff; the chairman of the board, Peter T. Grauer; and senior sales executives had made over 300 phone calls to subscribers to reassure them. A person briefed on those calls said no one immediately canceled their Bloomberg subscription.

Every Bloomberg user who logs onto a terminal is greeted with a screen that contains a letter from Mr. Doctoroff calling the practice a “mistake” and addressing privacy concerns. The company is introducing a blog next week where subscribers can discuss concerns about data security. Bloomberg subscribers pay on average about $20,000 a year to lease each financial data-splicing desktop computer

Mr. Bloomberg, who stepped away from day-to-day operations when he became mayor, declined to comment on the situation at the company that bears his name. “No, I can’t say anything. I have an agreement with the Conflict of Interests Board,” he said in a news conference on Monday.

The company also began to discuss possible legal ramifications. While people close to the company doubted that clients would threaten legal action, Bloomberg hired outside lawyers on Friday to steer it through the crisis. The lawyers, according to the people close to the company, have assured Bloomberg that there is no basis for a lawsuit, since the subscribers did not suffer any damages and the information obtained was more trivial than confidential. An early analysis conducted by Bloomberg further suggested that reporters rarely, if ever, published stories based solely on information gleaned from the terminals.

The people close to the company also noted that Bloomberg’s sales agreement with subscribers disclosed that company employees had access to certain private information. While the agreement did not specify that Bloomberg News reporters were among those with access, the journalists are technically employees of Bloomberg L.P.

But some bank executives said the snooping could have violated a common confidentiality clause in their contracts with Bloomberg. In the clause, Bloomberg promises to keep large swaths of information “in confidence,” meaning that it won’t be shared with “third parties.”

One Wall Street executive, who asked not to be named because of a firm policy prohibiting employees from speaking to the media, said his company was involved in a sensitive situation last year and he now wondered if reporters were monitoring his activities.

Susanne Craig and Jack Ewing contributed reporting.