Earlier today, Mark Decambre of the New York Post broke a bombshell story:

Reporters at Bloomberg News used private information from Bloomberg terminals to spy on employees at Goldman Sachs.

And now it's clear that Bloomberg reporters used private terminal information to report on at least one other firm, too.

Wall Street firms pay Bloomberg millions of dollars a year to buy Bloomberg terminal accounts for their employees.

Until recently, Bloomberg News reporters with access to these private Bloomberg systems could see when specific Bloomberg clients were logging on and off and various search functions they use.

The Post's story revealed that reporters at Bloomberg News used this private information to spy on the activity of individual Goldman partners and use the information they discovered in developing Bloomberg news stories.

According to a source at JPMorgan, Bloomberg reporters also secretly used private client information on the terminal while reporting on JPMorgan's disastrous "London Whale" trade last year.

Bloomberg broke the news that a team of JPMorgan traders in London had made a massive bet on credit derivatives — a bet so big that it was causing distortions in the market. Bloomberg was also the first organization to name the trader responsible for this bet: Bruno Iksil.

Later, in a timeline of the Whale scandal, Bloomberg bragged about its leadership on this story:

April 5: Bloomberg News is first to report Iksil had roiled markets with CIO positions so large that they were distorting prices. The Wall Street Journal follows with a report that hedge funds are taking positions to bet against JPMorgan. The bank says the CIO hedges structural risks to bring assets and liabilities “into better alignment...

When news of the Whale trade became public, it encouraged other market participants to bet against JPMorgan, which likely contributed to the firm ultimately losing billions of dollars on the trade.

A source within JPMorgan says that the firm believes that, at the very least, Bloomberg News reporters used private login information on the Bloomberg terminal to determine that Bruno Iksil had left JPMorgan.

Bloomberg reporters, the source says, accessed private information on the terminal to determine that Iksil had not logged into his Bloomberg account for an unusually long period of time. Then the reporters confronted JPMorgan with this information and asked whether Iksil had left.

Iksil wasn't the only one, either.

According to the JPMorgan source, Bloomberg reporters would call JPMorgan CIO traders on their home phone numbers or personal cellphones and say, "Hey, I noticed you haven't used your Bloomberg Terminal in a while. Are you still with the bank?"

Bankers at JPMorgan expressed frustration with this to multiple Bloomberg reporters, a source said.

A Bloomberg spokesperson says he is unaware of any record of any such complaints.

The JPMorgan source also said that this has happened in broader instances at the bank and not just with the "London Whale" traders. But the "London Whale" event is when it became apparent to JPMorgan that Bloomberg reporters were using their private client information to spy on them.

"They were pretty blatant about saying they noticed if you haven't logged into your Bloomberg or you haven't been trading in a while," a JPMorgan source said.

The general sense is that the behavior of these Bloomberg News reporters was outrageous.

As one JPMorgan source said, when you buy a Bloomberg Terminal, "You don't think someone's tracking your every move."

If you're not already familiar with the Bloomberg Terminal, it's basically a computer that's targeted toward financial professionals so they can message other users, obtain real-time market data, news, and stock quotes among many other functions.

They're pretty much ubiquitous on Wall Street, and a subscription for one costs about $20,000 per year.

Considering the amount of data tracked by Bloomberg Terminals, abuse by Bloomberg News could have been even more widespread and insidious.

Bloomberg has acknowledged that reporters could see "broad information on which functions users access, such as equities or commodities."

A source at Goldman tells us that the firm was dumbfounded and outraged to discover what Bloomberg reporters were doing. The source says that, until recently, Bloomberg News reporters were able to see not just when individual Bloomberg subscribers logged in (and via what device), but what they did while they were logged in.

Specifically, the source says, Bloomberg News reporters were able to see:

When individual subscribers logged in and logged out (and from where).

What type of information these individual subscribers looked at and how often they looked at it.

Our source also said that Bloomberg reporters could see which subscribers read specific news stories, but Bloomberg says this is not the case.

"Limited customer relationship data has long been available to our journalists, and has never included clients’ security-level data, position data, trading data or messages."

Bloomberg acknowledged that reporters could see if clients logged in or off, and when, but not from their exact location. Reporters also could not see news stories or individual equities clients were looking at. They also could not view their communications. Reporters could only see general functions clients used in the past week.

It does not take much imagination to see how easily this private information could be used to gain a major edge in financial news reporting and to blindside Bloomberg clients who had no idea their private terminal activity was being recorded and monitored and made visible to the newsroom.

Here's one hypothetical example that a source gave us.

By focusing on the terminal activity of a particularly high-profile trader, Bloomberg News reporters might be able to determine what types of information the trader might be researching or monitoring. And the reporters might then be able to use this information to ask questions of other traders and, thus, figure out what the particular trader was doing.

The source used legendary trader Steve Cohen of S.A.C. Capital as an example. (Note: We ran this by Bloomberg, and they said this particular example would also be impossible, because reporters would not have been able to see Cohen's searches for individual equities. We do not yet know exactly what search information was visible to reporters, though some Bloomberg terminal search functions are quite specific.)

Steve Cohen, the source speculated, presumably has an account with Bloomberg. If so, with a few keystrokes, a Bloomberg reporter would have been able to determine when Steve Cohen was logged on to his Bloomberg account and what information he was looking at. If Steve Cohen seemed particularly interested in the price of, say, Apple stock, then the reporter might reasonably conclude that Steve Cohen was monitoring or thinking about making a trade in Apple stock. And the reporter might then be able to use that information to ask around and figure out exactly what Steve Cohen was up to.

A few weeks ago, when Goldman discovered what Bloomberg reporters were doing, the firm complained to Bloomberg. Bloomberg subsequently made it impossible for its reporters to see some of the private information they had been using.

"In light of [Goldman's] concern as well as a general heightened sensitivity to data access, we decided to disable journalist access to this customer relationship information for all clients," Bloomberg said in an emailed statement.

UPDATE: A few hours after we published this story, Bloomberg forwarded the following email from the President of Bloomberg, LP, Dan Doctoroff. In the email, which was sent to Bloomberg employees, Doctoroff says the firm made a mistake:

----- Original Message -----

From: D DOCTOROFF (BLOOMBERG/ 731 LEXIN)

At: May 10 2013 16:15:39



Since our founding more than 30 years ago, the proper safeguarding of customer data has been a central tenet of Bloomberg’s culture.



A Bloomberg client recently raised a concern that Bloomberg News reporters had access to limited customer relationship management data through their use of the Bloomberg terminal. Although we have long made limited customer relationship data available to our journalists, we realize this was a mistake.



Having recognized this mistake, we took immediate action. Last month we changed our policy so that all reporters only have access to the same customer relationship data available to our clients. Additionally, we decided to further centralize our data security efforts by appointing Steve Ross, one of our most senior executives, to the new position of Client Data Compliance Officer. Steve is responsible for reviewing and, if necessary, enhancing protocols which among other things will continue to ensure that our news operations never have access to confidential customer data.



To be clear, the limited customer relationship data previously available to our reporters never included access to our trading, portfolio, monitor, blotter or other related systems or our clients' messages. Moreover, reporters could not see news stories that clients read, or the securities they viewed. Bloomberg has very strict data security policies in place, in addition to significant and rigorous training, processes and protocols. Upon hiring, all Bloomberg employees enter into confidentiality provisions, including Bloomberg News.



Client trust is our highest priority and the cornerstone of our business, and we are deeply committed to ensuring the complete integrity and confidentiality of our clients' data in all situations and at all times.



Dan