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, Treasury Department 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 among the first to report on the trader Bruno Iksil, nicknamed the London Whale. “I'm unaware of any record of a complaint from either bank on this issue,” said Ty Trippet, a Bloomberg spokesman. The fallout continued on Monday. Bloomberg has now received roughly 20 inquiries about whether reporting practices violated the company's policies 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 contacted Bloomberg in recent days, according to these people, who spoke on the condition they not be identified discussing confidential conversations. The banks all declined to comment. In response, the company has been contacting subscribers.

“Since the news came out, my executive team and I have personally reached out to more than 300 clients,” Daniel L. Doctoroff, chief executive of Bloomberg L.P., wrote in a blog post late Monday night. “We started each conversation with an apology.” A person briefed on those conversations said no one immediately canceled their 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 preparing a blog where subscribers can discuss concerns about data security. Bloomberg subscribers pay on average about $20,000 a year to lease each terminal.

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.”

Susanne Craig and Jack Ewing contributed reporting.

A version of this article appeared in print on May 14, 2013, on page B1 of the New York edition with the headline: More Clients Ask Questions Of Bloomberg.