The Securities and Exchange Commission (SEC) faces a lawsuit filed by the New Civil Liberties Alliance (NCLA) on Tuesday accusing the government agency of illegally collecting data on every American citizen who invests in the stock market. The lawsuit targets the SEC’s “Consolidated Audit Trail” (CAT) program which allegedly forces brokers exchanges clearing agencies and alternative trading systems to capture and turn over detailed information about every investor’s trades into a centralized database.
According to the NCLA this shocking effort has been undertaken without congressional authorization and in direct violation of Americans’ Fourth Amendment right protections against unreasonable government search and seizure of private information. “By seizing all financial data from all Americans who trade in the American exchanges SEC arrogates surveillance powers and appropriates billions of dollars without a shred of Congressional authority — all while putting Americans’ savings and investments at grave and perpetual risk” NCLA senior litigation counsel Peggy Little explained in a statement.
The CAT program created under former President Barack Obama with bipartisan support within the SEC is a self-appropriated multi-billion-dollar fund with the funding coming from a variety of fees collected by the agency through investment transactions according to the NCLA. The nonpartisan nonprofit civil rights group declared the CAT program to be “completely unlawful” and argued that it puts Americans’ financial data at “grave risk.”
It’s a good thing Congress didn’t just expand and reauthorize FISA without requiring a warrant.
Oh wait.https://t.co/0l5qDArjWY
— Mike Lee (@BasedMikeLee) April 22, 2024
Little further explained to Fox News Digital that every piece of “trade information on every investor’s trades from inception to completion” is collected and stored in the SEC’s database including information about Americans’ 401(k) or 529 Education Fund. “And there is simply no law that permits them to do that and the Fourth Amendment forbids them to do that” she added.
The NCLA declared in its lawsuit filed in the Western District of Texas that CAT is “the greatest government mandated mass collection of personal financial data in United States history.” “Historically a government that wished to track its citizens had to devote large resources to having them followed” the lawsuit noted. “That is no longer the case: modern surveillance tools enable mass tracking of individuals’ every movement every transaction every purchase sale or transfer of securities at low cost while powerful computer algorithms can process that information to reveal personal and private details of each person’s financial life or investment strategy.”
“The Founders provided rock-solid protections in our Constitution to prevent just these autocratic and dangerous actions. This CAT must be ripped out root and branch” Little emphasized.
