A new lawsuit alleges that the U.S. Securities and Exchange Commission (SEC) has been illegally tracking the data of Americans who have invested in the stock market.
The lawsuit, filed by the New Civil Liberties Alliance last week in Texas, claims that the agency has been illegally collecting data through the “Consolidated Audit Trail” program (CAT), and that the program is unconstitutional.
The SEC is accused of storing and tracking data that involves “trade information on every investor’s trades from inception to completion,” which they claim violates the Fourth Amendment.
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“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,” Peggy Little, NCLA senior litigation counsel told Fox News. “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.”
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According to Barron’s, the CAT program is a trade-reporting audit system approved in 2016 that allows the SEC and the stock exchange to “trace every order for a nationally-traded stock from origination through modifications, routing, and execution.”
The most recent budget approval from the government for the CAT program was $200 million.
The class action lawsuit alleges “modern surveillance tools enable mass tracking of individuals’ every move” and the SEC can do so without allocating additional time or resources to collect the desired data.
“Powerful computer algorithms can process that information to reveal personal and private details of each person’s financial life or investment strategy,” the lawsuit says, per Bloomberg.
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