The Securities and Exchange Commission (SEC) has been hit with a class action lawsuit filed by the New Civil Liberties Alliance (NCLA) on Tuesday. The lawsuit alleges that the SEC is illegally collecting vast amounts of personally identifiable data on every American citizen who invests in the stock market through its “Consolidated Audit Trail” (CAT) program.
According to the lawsuit filed in the Western District of Texas the SEC’s CAT program 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. The NCLA argues that this effort has been undertaken without congressional authorization and violates Americans’ Fourth Amendment right protections against unreasonable government search and seizure of private information.
NCLA senior litigation counsel Peggy Little 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 CAT program which was created under former President Barack Obama with bipartisan support within the SEC is a self-appropriated multi-billion-dollar fund. The funding for the program comes from a variety of fees collected by the agency through investment transactions according to the NCLA.
In an interview with Fox News Digital Little further explained that every piece of “trade information on every investor’s trades from inception to completion” is collected and stored in the SEC’s database. This includes information about Americans’ 401(k) or 529 Education Fund. Little argued “And there is simply no law that permits them to do that and the Fourth Amendment forbids them to do that.”
The NCLA’s lawsuit declares that CAT is “the greatest government mandated mass collection of personal financial data in United States history.” It notes that while historically a government wishing to track its citizens had to devote large resources to having them followed modern surveillance tools now enable mass tracking of individuals’ every movement transaction purchase sale or transfer of securities at low cost. Powerful computer algorithms can then process that information to reveal personal and private details of each person’s financial life or investment strategy.
The lawsuit challenges what the NCLA describes as the SEC’s “shocking arrogation of power to impose dystopian surveillance suspicionless seizures and real or potential searches on millions of American investors.”
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
