An independent review is needed after Bloomberg's admission that its reporters had access to some proprietary client information on its data terminals, former SEC Chairman Harvey Pitt told CNBC on Monday.
The admission indicates an oversight failure at the company, said Pitt, who was chairman of the Securities and Exchange Commission under President George W. Bush.
"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."
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."
Bart Chilton, commissioner at the Commodities Futures Trading Commission, told CNBC, "There's something of a void here in that there is no regulator that really looks after new information providers."
But he said that the CFTC plans to pass a rule later this week that could allow the agency an oversight role.
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, now CEO of consulting firm Kalorama Partners, 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 added. "[But] there's an oversight function here and it wasn't being performed."
Meanwhile, privacy expert Joel Reidenberg from Fordham University School of Law told CNBC that what happened wasn't illegal. "It wasn't like News of the World where they were committing crimes where they were hacking into contents of people's messages," he said.
In his op-ed, Winkler wrote, "The recent complaints go to practices that are almost as old as Bloomberg News." He added that reporters used interact with clients in the early days of the company and ask them what topics they wanted to see covered.
Winkler continued that reporters had access to "mundane" data like client log-on information and help desk inquiries. "At no time did reporters have access to trading, portfolio, monitor, blotter or other related systems. Nor did they have access to clients' messages to one another. They couldn't see the stories that clients were reading or the securities clients might be looking at."
CFTC's Chilton said, "Anytime there's a permeable membrane between the trading arm and the news arm that's a huge issue."
Yale School of Management Jeffrey Sonnenfeld said on "Squawk Box" that its an issue of trust. "I think the perception is worse than the reality. I think the symbolism is real. But the symbolism and the substance are different here."
Reidenberg disagreed, saying it raises serious questions about "surveillance and spying" as it pertains to data privacy. "Even though American law today doesn't protect against this, it doesn't diminish concern that most Americans have."