Challenging the Unconstitutional CAT: NCLA Files Complaint Against SEC

The Securities and Exchange Commission (SEC) is facing a legal challenge over its controversial “Consolidated Audit Trail” (CAT), which has been described as the largest government-mandated mass collection of personal financial data in American history. The New Civil Liberties Alliance has filed a complaint against the SEC, arguing that the CAT system violates constitutional rights and poses a significant risk to the financial security of all Americans.

The CAT system requires brokers, exchanges, clearing agencies, and alternative trading systems to capture and send detailed information on every investor’s trades in U.S. markets to a centralized database. This database would reportedly be the largest securities database ever created, putting every American’s financial data at risk from cybersecurity breaches.

The National Center’s Free Enterprise Project is one of the plaintiffs challenging the SEC’s CAT system, arguing that the agency has overstepped its authority and violated the Constitution by implementing this mass surveillance scheme without congressional authorization. The complaint urges the U.S. District Court for the Western District of Texas to stop the unlawful seizure of personal financial data.

FEP Director Scott Shepard emphasized the importance of standing up for the interests of capital investors and criticized the SEC for potentially abusing the vast cache of financial information it would have access to through the CAT system. The legal challenge aims to protect the privacy and decency of all Americans who would be affected by this unprecedented data collection and surveillance program.

The National Center for Public Policy Research, a non-partisan, free-market think-tank, is leading the charge against the SEC’s CAT system, with the support of individuals who are concerned about the implications of such a massive government database. The case highlights the ongoing debate over privacy rights and government surveillance in the digital age, raising important questions about the limits of regulatory power and the protection of individual liberties.