by Emmitt Barry, Worthy News Correspondent
(Worthy News) – According to a new lawsuit, the Securities and Exchange Commission (SEC) is unlawfully gathering data on every citizen who invests in the stock market.
The New Civil Liberties Alliance (NCLA) filed a lawsuit against the SEC on Tuesday, alleging that the agency is amassing large quantities of personally identifiable information through its “Consolidated Audit Trail” (CAT) program.
The NCLA’s lawsuit alleges that the SEC, through the Consolidated Audit Trail (CAT), mandates the most extensive government-directed collection of personal financial data in American history. Without any statutory authority, the SEC requires brokers, exchanges, clearing agencies, and alternative trading systems to gather and submit detailed information on every investor’s trades in U.S. markets to a centralized database. This database, accessible indefinitely by the SEC and private regulators, stores comprehensive trade data from across the nation.
According to the NCLA, the CAT database is poised to become the largest securities database ever established, and the most colossal government database outside of the National Security Agency (NSA).
This extensive collection of American financial data significantly heightens the risk of cybersecurity breaches, putting the financial security and privacy of all Americans at severe and unnecessary risk. Concentrating such vast amounts of data in a single government-held database greatly amplifies both the probability and potential impact of a catastrophic security breach that could jeopardize the financial stability of all Americans.
In its lawsuit, the NCLA will argue that Congress never granted the SEC the authority to establish such a data collection and surveillance system. By implementing it regardless, the SEC is usurping legislative power, thereby violating Article I of the Constitution, which assigns all legislative authority exclusively to Congress.
The NCLA highlighted that SEC Commissioner Hester Peirce has criticized the CAT system as “a dangerous dog.” The NCLA emphasized that Americans would never accept government agencies collaborating with private companies to gather comprehensive data on all their purchases, nor would they tolerate giving the government a “direct feed” from their car GPS systems to track their movements.
“SEC’s CAT has no precedent in history. 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 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,” stated Peggy Little, Senior Litigation Counsel of the NCLA.
The NCLA, a nonpartisan, nonprofit civil rights organization, was established by esteemed legal scholar Philip Hamburger to defend constitutional freedoms against encroachments by the Administrative State. Through its public-interest litigation and other pro bono work, NCLA aims to curb the unauthorized powers of state and federal agencies and ignite a new civil liberties movement dedicated to reinstating the fundamental rights of Americans.
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