‘Mass Surveillance’ Suit Filed Against SEC Over Monitoring of Stock Market Data

‘Mass Surveillance’ Suit Filed Against SEC Over Monitoring of Stock Market Data

Penka Hristovska Penka Hristovska
Published on: April 24, 2024

A new lawsuit accuses the Securities and Exchange Commission (SEC) of unlawfully gathering data on every citizen who invests in the stock market. The lawsuit, spearheaded by the National Center for Public Policy Research, alleges the SEC is overstepping its authority through its Consolidated Audit Trail (CAT) program.

The program, according to the lawsuit, mandates brokers, exchanges, clearing agencies, and alternative trading systems to collect and transmit extensive personal data from every investor’s trades in US markets to a centralized database. It describes CAT as a “shocking arrogation of power to impose dystopian surveillance, suspicionless seizures, and real or potential searches on millions of American investors.”

The NCLA claims that the SEC is collecting this data without congressional authorization and in violation of the Fourth Amendment, which protects against unreasonable government searches and seizures of private information.

“Historically, a government that wished to track its citizens had to devote large resources to having them followed. That is no longer the case: modern surveillance tools enable mass tracking of individuals’ every movement, every transaction, every purchase, sale, or transfer of securities at low cost while powerful computer algorithms can process that information to reveal personal and private details of each person’s financial life or investment strategy,” the lawsuit reads.

The lawsuit further argues that the CAT program’s financing operation is without proper legal authorization as well. NCLA explains in the suit that the multibillion-dollar initiative is funded by fees the SEC collects from transactions made in the investment markets. The group says this self-funded approach is not only unlawful but it also places Americans’ financial data at “grave risk.”

“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,” said NCLA senior litigation counsel Peggy Little.

“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,” she added.

Source of Article