SEC illegally tracking Americans who invest in the stock market, lawsuit claims

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By Fox News

The Securities and Exchange Commission (SEC) illegally collects the data of every citizen who invests in the stock market, according to a new lawsuit.

The New Civil Liberties Alliance (NCLA) filed suit Tuesday against the SEC, claiming that the agency, through its “Consolidated Audit Trail” or “CAT” program, collects massive amounts of personally identifiable data by forcing brokers, stock exchanges, compensations. alternative trading agencies and systems to capture and send detailed information about each investor’s transactions in U.S. markets to a centralized database.

The agency is doing so, according to NCLA, without congressional authorization and in violation of the Fourth Amendment, which prohibits unreasonable government searches and seizures of private information.

Conceived during the Obama administration with bipartisan support on the Commission, the CAT program is a multibillion-dollar self-appropriated fund, fueled by various fees that the SEC collected through investment transactions, says the NCLA. The group calls it “completely illegal” and says it puts Americans’ financial data at “grave risk.”

“By seizing all the financial data of every American who trades on U.S. stock exchanges, the SEC is assuming surveillance powers and appropriating billions of dollars without the slightest authority from Congress – while putting the savings and Americans’ investments in grave and perpetual danger,” said Peggy Little. , senior litigation attorney at NCLA.

“The Founders provided ironclad protections in our Constitution to prevent these autocratic and dangerous actions. This CAT needs to be pulled out, root and branch,” she said.

The lawsuit, filed in the U.S. District Court for the Western District of Texas, calls CAT “the largest government-mandated mass collection of personal financial data in U.S. history.”

“Historically, a government that wanted to track its citizens had to devote significant resources to tracking them. This is no longer the case: modern surveillance tools allow every movement, every transaction, every purchase, sale or transfer of securities to be tracked en masse at low cost, while powerful computer algorithms can process this information to reveal the details personal and private of each person. the person’s financial life or investment strategy,” the lawsuit states.

“This class action challenges the shocking arrogance of the SEC’s power to impose dystopian surveillance, suspicionless seizures, and actual or potential searches on millions of American investors.”

Little told Fox News Digital that the SEC collects and stores in its database “all trading information about each investor’s transactions, from start to finish,” citing funds like 401(k) or 529 Education Fund as examples.

“And there is simply no law that allows them to do that, and the Fourth Amendment prohibits them from doing that,” she said.

“And here’s the dirty little truth: All American investors will pay for this because it’s paid for by the fees that the SROs (self-regulatory organizations) extract from the brokerages, which charge their clients… I mean, it’s a sum of several billion dollars. a tax on American investors and investments, and no one ever voted for it.

An SEC spokesperson told Fox News Digital that “the Commission carries out its regulatory responsibilities consistent with its authorities.”

In an opinion piece published Monday in the Wall Street Journal, former Attorney General William Barr asserted that “even when the government seeks information about a citizen from banks, telephone companies and others with whom it has done business, the government is not free.” vacuuming with white card.

Barr noted that the essence of the SEC’s argument for the CAT program is that “it could investigate more easily if it were not limited to collecting investor information on a case-by-case basis after the occurrence.” of alleged wrongdoing.

“But the purpose of the Fourth Amendment is to make government less effective by making it jump through hoops when it seeks to meddle in private affairs,” Barr wrote.

“For an agency to assert that it should be able to avoid these obstacles to facilitate investigations is to assert that it should be exempt from the Fourth Amendment.”