The Securities and Exchange Commission (SEC) is illegally collecting data on every citizen who invests in the stock market, according to a new lawsuit.
The New Civil Liberties Union (NCLA) on Tuesday accused the SEC of forcing brokers, exchanges, and clearinghouses to collect large amounts of personally identifiable data through its “Consolidated Audit Trail” (“CAT”) program. filed a lawsuit against the SEC. Utilizes agents and alternative trading systems to obtain detailed information on all investor trades in the US market and sends it to a central database.
NCLA said the agency was doing this without Congressional authorization, violating the Fourth Amendment, which prohibits the government from unreasonably searching and seizing personal information.
According to NCLA, the CAT program was developed during the Obama administration with bipartisan support within the commission and is a multibillion-dollar self-appropriation program driven by various fees collected by the SEC through investment transactions. It is a fund. The group calls this “totally illegal” and says it puts Americans’ financial data at “significant risk.”
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A Securities and Exchange Commission seal on a wall at SEC headquarters in Washington, D.C., June 19, 2015. (AP Photo/Andrew Harnik, File)
“By seizing all financial data from every American who trades on American exchanges, the SEC is usurping its oversight powers and embezzling billions of dollars without a shred of authority from Congress. All the while putting Americans’ savings and investments at significant and lasting risk,” said Peggy Little. , NCLA Senior Litigation Attorney.
“The Founders of our nation created rock-solid protections in the Constitution to prevent precisely this kind of dictatorial and dangerous behavior. This CAT must be uprooted, root and branch,” she said.
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Pedestrians pass by the New York Stock Exchange on May 5, 2022 in Manhattan, New York City. (AP Photo/John Minchillo, File)
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, governments that wanted to track their citizens had to expend significant resources to have them tracked. That is no longer the case. Modern surveillance tools allow us to track a person’s every move, every transaction, Every purchase, sale, and transfer can be tracked at scale.” Powerful computer algorithms can process that information to reveal the personal and private details of each person’s financial life and investment strategy. “while being able to obtain securities at a lower cost,” the complaint states.
“This class action complaint challenges the SEC’s staggering overreach in imposing dystopian surveillance, unquestioned seizures, and actual and potential searches on millions of American investors. ”.
Little told Fox News Digital that the SEC collects and stores “all trade information for every investor’s trade from inception to completion” in a database, including funds such as 401(k) and 529 education funds. He said he was citing.
“And there’s no law that would allow them to do that. The Fourth Amendment prohibits them from doing that,” she said.
“And here’s the dirty truth: This is paid for by the fees paid by SROs, so every American involved in investing will end up paying this cost.” [self-regulatory organizations] It’s a tax from brokerage firms that they charge their customers… So this is billions of dollars in taxes on American investors and American investments, and no one ever voted for this. ”
An SEC spokesperson told Fox News Digital that “the Commission is consistent with the agency in its regulatory responsibilities.”
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Securities and Exchange Commission headquarters in Washington, DC, January 27, 2023. (Graham Sloan/Bloomberg via Getty Images)
In an op-ed published Monday in the Wall Street Journal, former Attorney General William Barr wrote, “Even if the government seeks information about its citizens from banks, phone companies, and other people with whom it has business relationships, It’s not freedom.” This is to clean it completely. ”
Barr said the core of the SEC’s claims against the CAT program “would be easier to investigate if it were not limited to collecting investor information on a case-by-case basis after an alleged wrongdoing.” He pointed out that there is a point.
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“But the whole point of the Fourth Amendment is to make government less efficient by forcing it to overstep its bounds when it wants to get into private matters,” Barr said. wrote.
“To argue that government agencies should be able to jump through these hoops to facilitate investigations is the same as arguing that they should be exempt from the Fourth Amendment.”
