A new lawsuit has been filed against the Securities and Exchange Commission (SEC) by the New Civil Liberties Alliance (NCLA), accusing the agency of illegally collecting data from every citizen who invests in the stock market. The lawsuit claims that through its 'Consolidated Audit Trail' (CAT) program, the SEC is gathering vast amounts of personally identifiable information by mandating brokers, exchanges, clearing agencies, and alternative trading systems to provide detailed data on every investor's trades in U.S. markets to a centralized database.
The NCLA argues that the SEC is conducting these activities without proper authorization from Congress and in violation of the Fourth Amendment, which protects against unreasonable government search and seizure of private information. The CAT program, initiated during the Obama administration with bipartisan support, is funded by fees collected by the SEC through investment transactions, making it a multibillion-dollar initiative according to NCLA.
