The Securities and Exchange Commission (SEC) is facing a new lawsuit alleging that the agency is illegally collecting data on every citizen who invests in the stock market. The New Civil Liberties Alliance (NCLA) filed the suit, claiming that the SEC’s “Consolidated Audit Trail” program is gathering vast amounts of personally identifiable information without authorization from Congress and in violation of the Fourth Amendment.
The CAT program, which was conceived during the Obama administration, collects data on every investor’s trades in U.S. markets and stores it in a centralized database. The NCLA argues that this program is “completely unlawful” and puts Americans’ financial data at risk.
Peggy Little, NCLA senior litigation counsel, stated, “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.”
The lawsuit, filed in the district court for the Western District of Texas, calls CAT “the greatest government mandated mass collection of personal financial data in United States history.” Former Attorney General William Barr also weighed in, arguing that the SEC’s actions violate the Fourth Amendment’s protections against unreasonable government search and seizure.
The SEC maintains that it operates within its regulatory authorities, but critics argue that the agency’s actions represent a dangerous overreach. The outcome of this lawsuit could have significant implications for the privacy rights of American investors.
