Bloomberg has hired former International Business Machines Corp. (NYSE:IBM) CEO Samuel Palmisano in an independent advisory position to deal with the company’s burgeoning privacy problems. Last week it became clear that investment banks were worried about using Bloomberg Terminals as they believe that the company’s journalists used terminal data to inform their reporting on the London Whale scandal.
In a piece that appeared on Reuters earlier today, Jennifer Saba reported the new hire at the news agency/financial data provider. The move is one of several in recent days that seeks to reassure banks that though some data was leaked during the London Whale scandal, there will not be a repeat of the fiasco.
According to Bloomberg’s own admission, journalists had limited access to some data from the company’s terminals including when a user logged in, and when they looked at information about specific stocks and bonds. The company received an official complaint from Goldman Sachs Group Inc. (NYSE:GS) about the practice.
Bloomberg In Trouble
With many more of its clients looking into the allegations, and many sovereign governments also reviewing the claims, Bloomberg is in serious trouble. The company hired a new Data Compliance Officer last week in one of its first moves designed to staunch the flow of information into the wrong hands.
Samuel Palmisano was the Chairman and CEO at International Business Machines Corp. (NYSE:IBM) from 2002 until 2012. In that time he revolutionized the company, changing it from a PC manufacturer into a business services company, with a huge place in the server market.
Clark Hoyt, Editor At Large at Bloomberg News, was asked to review the relationship between the firm’s financial data arm and its new operation. The company also took on the services of Promontory Financial Group, a financial services company, and law firm Hogan Lovells to conduct a review of the problem, and recommend solutions.
Bloomberg is doing everything that it can to heal any injury that might have been caused by this breach of trust. The company may not be able to do enough, however. There are alternatives to its service, and some of them may seem more inviting since the Bloomberg name has been tarnished.
There is no doubt that Bloomberg will be as open and transparent as possible about its moves to remedy the data leak as time goes on. The company’s reputation, and its sales numbers, rely entirely on them doing so.