Bloomberg's admission that its reporters had access to some client information on its data terminals indicates an oversight failure, and an independent review is needed, former SEC Chairman Harvey Pitt tells CNBC.
The admission indicates an oversight failure at the company, Pitt said.
"All we know is what the people who put all of this terrible activity in place are now telling us," Pitt said in a " Squawk Box " interview. "We just have Bloomberg's denials. And at this point, those aren't very credible."
(Read More: Fed, Treasury Examining Bloomberg Use of Terminal Data )
In an op-ed, Matthew Winkler, editor-in-chief of Bloomberg News, wrote that the news division is holding itself accountable. He acknowledged, "Our reporters should not have access to any data considered proprietary. I am sorry they did. The error is inexcusable."
The issue came to light after a Bloomberg reporter called Goldman Sachs inquiring about a partner's employment status and noting the partner had not logged on to the Bloomberg terminal lately. Goldman complained to Bloomberg, leading Bloomberg to terminate the ability of its reporters to monitor subscribers.
(Read More: Bloomberg Reporters Admit to Terminal Snooping )
Pitt said part of the oversight responsibility is that of Bloomberg's board of directors, of which another former SEC chairman, Arthur Levitt, is a member. "I don't believe Arthur or any of the other directors necessarily knew what was going on," Pitt said. "[But] there's an oversight function here and it wasn't being performed."
(Disclosure: CNBC is a competitor of Bloomberg in reporting and distributing business news on the web and on television.)
image: © Lisamarie Babik