The New Civil Liberties Alliance (NCLA) has filed a class action lawsuit in the Western District of Texas accusing the Securities and Exchange Commission (SEC) of illegally collecting vast amounts of personal data on every American citizen who invests in the stock market. The lawsuit, filed on Tuesday, targets the SEC’s “Consolidated Audit Trail” (CAT) program, which the NCLA argues violates Americans’ Fourth Amendment right protections against unreasonable government search and seizure of private information.
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
According to the lawsuit, the CAT program, established under former President Barack Obama with bipartisan support within the SEC, mandates that brokers, exchanges, clearing agencies, and alternative trading systems capture and submit detailed information about every investor’s trades to a centralized database. The NCLA states that the program’s funding comes from various fees collected by the agency through investment transactions, making it a self-appropriated multi-billion-dollar fund.
The NCLA’s lawsuit asserts that CAT represents “the greatest government mandated mass collection of personal financial data in United States history.” It points out that modern surveillance tools now enable mass tracking of individuals’ every movement, transaction, purchase, sale, or transfer of securities at low cost, while powerful computer algorithms can analyze that information to uncover personal and private details of each person’s financial life or investment strategy.
In a statement to Fox News Digital, NCLA senior litigation counsel Peggy Little elaborated that the SEC’s database collects and stores every piece of “trade information on every investor’s trades from inception to completion,” including information about Americans’ 401(k) or 529 Education Fund. She contended, “And there is simply no law that permits them to do that, and the Fourth Amendment forbids them to do that.”
Little also asserted, “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.”
