Lawsuit accuses SEC of unlawful surveillance through stock market data collection

A lawsuit has been filed against the U.S. Securities and Exchange Commission (SEC), alleging illegal surveillance of Americans through its data collection practices.

The lawsuit, spearheaded by the New Civil Liberties Alliance (NCLA), claims the SEC's "Consolidated Audit Trail" (CAT) program infringes on Fourth Amendment rights – which protect citizens from unreasonable government searches and seizures.

According to the NCLA, the SEC has overstepped its boundaries by mandating brokers and trading platforms to submit detailed trade data to a centralized database without explicit congressional approval.

This has reportedly put the financial information of millions of Americans at serious risk.

"By seizing all financial data from Americans who trade on the exchanges, the SEC appropriates surveillance powers and billions of dollars without congressional authorization, endangering Americans’ savings and investments," stated Peggy Little, NCLA senior litigation counsel.

The CAT program originated during the Obama administration and was designed to enhance regulatory oversight of the financial markets through comprehensive data collection.

Funded by various fees collected from investment transactions, the program has been described by critics like Little as "completely unlawful."

The legal action, filed in the Western District of Texas, labels the CAT initiative as the most extensive government-mandated collection of personal financial data in the United States' history.

The complaint outlines concerns that modern surveillance capabilities allow the government to effortlessly track individuals’ financial activities – revealing personal details about each person's financial life and investment strategies.

In defense, an SEC spokesperson asserted that the Commission's actions are in line with its regulatory responsibilities.

However, the debate continues with viewpoints like that of former Attorney General William Barr, who emphasized in The Wall Street Journal that the government should not bypass legal safeguards designed to protect citizens’ private affairs for the sake of investigatory convenience.

Source: Newsroom