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) for unlawful surveillance of Americans through its data collection practices.

The lawsuit, led by the New Civil Liberties Alliance (NCLA), alleges that the SEC’s Consolidated Audit Trail (CAT) program violates Fourth Amendment rights – which protect citizens from unreasonable searches and government seizures.

According to the NCLA, the SEC has overstepped its bounds by requiring brokers and trading platforms to submit detailed trading data to a centralized database without explicit approval from Congress.

This has reportedly seriously compromised the financial information of millions of Americans.

“By seizing all the financial data of Americans trading on the stock exchanges, the SEC is usurping regulatory powers and billions of dollars without congressional approval, putting Americans’ savings and investments at risk,” said Peggy Little, Sr. NCLA trial attorney.

The CAT program emerged during the Obama administration and was intended to improve regulatory oversight of financial markets through extensive data collection.

The program, funded by various fees resulting from investment transactions, 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 comprehensive government-mandated collection of personal financial data in United States history.

The complaint outlines concerns that modern surveillance capabilities allow the government to effortlessly monitor the financial activities of individuals, revealing personal details about each person’s financial lives and investment strategies.

In its defense, an SEC spokesperson asserted that the Commission’s actions are consistent with its regulatory responsibilities.

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

Source: Newsroom