• by Thom Forbes  @tforbes, May 14, 2013

“Appease nervous customers” is not a phrase any business wants to see in a story about itself but coverage in the New York Times says that what executives at Bloomberg are attempting to do as the crisis over the disclosure of a single reporter’s breach of security on the company’s financial data terminals widens, deepens and lengthens.

“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, report the Times’ Amy Chozick and Ben Protess. “The bank also contacted Bloomberg to raise questions about the security of its employees’ private information,” according to “people briefed on the matter.”

“The Bloomberg snooping scandal is less remarkable for what the journalists were doing, accessing information wherever they could to find news, than for what a surprise it seems to Wall Street,” writesUSA Today editor-in-chief David Calloway, who worked for Bloomberg in the mid-90s. “That the expensive information systems they pay for provide the ability to,” as he wrote earlier, “bring transparency to the opaque and manipulative world of global financial markets.”

Financial Times –- a property that Michael Bloomberg is said to have “long adored” and is rumored to have his eyes on purchasing should he ever put the wraps on his political career -- meanwhile reports that a client’s email messages that a former employee apparently thought he was uploading to a secure server for analysis were instead uploaded to the Internet.  

The messages were discovered by a Google search, an industry source tells Daniel Schäfer and Andrew Edgecliffe-Johnson, but were taken down after they asked about them. “They showed information such as unique Bloomberg user identifiers, real names and traders’ email addresses, as well as confidential financial price information and trading activity,” they write.

“This work was done with client consent, where emails were explicitly forwarded to us to a dedicated email account and released by the person responsible for the email so that we could conduct internal testing to improve our technology for the client,” a Bloomberg spokesman tells Schäfer and Edgecliffe-Johnson.

Bloomberg Editor-in-Chief Matt Winkler and CEO Daniel Doctoroff have been front and center as the crisis has unfolded, as you might expect from seasoned communications executives. Doctoroff on Friday wrote on the “Bloomberg Blog:” “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.”

But Jonathan Bernstein, president of Bernstein Crisis Management, tells CNBC’s Jeff Cox that it’s not enough to just apologize. “You're going to have to engage in a campaign of transparency and consistency before people are going to trust you again," he says. “There are other ways to get that data (on the terminals), and I would guess now that some companies are going to find other ways to do it.”

The always expressive Jim Cramer is among several observers who point out that there are few viable alternatives to the Bloomberg terminals, however, and he also says that he believes Winkler – “an incredibly trustworthy man” -- when he claims Bloomberg reporters have “never compromised the integrity of [customer] data in our reporting.”

Doctoroff followed up his Friday post with an entirely new blog yesterday -- “The Latest from our CEO.” In his first post, he reports “since the news came out, my executive team and I have personally reached out to more than 300 clients. We started each conversation with an apology for our mistake.” It concludes with his email address for any questions Bloomberg’s 315,000 subscribers might have.

Under the headline, “Holding Ourselves Accountable,” Winkler posted the following editorial comment early Monday morning: “As I wrote in ‘The Bloomberg Way,’ our guide for reporters and editors, “The appearance of impropriety can be as damaging to a reputation as doing something improper. Because we hold others accountable for disclosure, we expect the same of ourselves. While disclosing errors of judgment may be embarrassing, the sooner the lapses are reported, the sooner there is nothing more to say.”

That’s nice in theory but it presumes there is nothing more to report.

“Some observers have suggested Bloomberg hire an outside party to investigate or hire an independent ombudsman who can address questions of fairness and objectivity,” writes MSNMoney.com’s Jonathan Berr, another former Bloomberg staffer. “These steps would be a good start. Unfortunately, this scandal isn't going away anytime soon.”

And neither is the coverage, you can bet. Schadenfreude, like the Dow, is setting record highs on Wall Street.