A new lawsuit alleges that the U.S. Securities and Exchange Commission (SEC) illegally monitored the data of Americans who invested in the stock market.
The lawsuit, filed by the New Civil Liberties Alliance last week in Texas, claims that the agency illegally collected data through the “Consolidated Audit Trail” (CAT) program and that the program is unconstitutional.
The SEC is accused of storing and monitoring data involving “trading information about each investor’s trades from inception to completion,” which they say violates the Fourth Amendment.
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“By seizing the financial data of all Americans who trade on American stock exchanges, the SEC arrogates surveillance powers and embezzles billions of dollars without an ounce of congressional authority, all while putting Americans’ savings and investments at risk. severe and perpetual,” NCLA senior counsel Peggy Little told Fox News. “The Founders provided rock-solid protections in our Constitution to prevent precisely these autocratic and dangerous actions. This CAT must be uprooted, root and branch.”
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Second Barron’sThe CAT program is a trade reporting audit system approved in 2016 that allows the SEC and exchange to “trace every order for a domestically traded security from origination through modifications, routing, and execution.”
The government’s last budget approval for the CAT program was $200 million.
The class action lawsuit argues that “modern surveillance tools enable mass monitoring of individuals’ every movement” and the SEC can do so without allocating additional time or resources to collect the desired data.
“Powerful computer algorithms can process such information to reveal personal and private details of each person’s financial life or investment strategy,” the lawsuit states, according to Bloomberg.