SEC illegally tracks Americans investing in stock market, alleges lawsuit

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From Fox News

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 said the SEC is 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.”

“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.

“Our Founders provided strong protections in the Constitution to prevent these dictatorial and dangerous practices. This CAT must be torn out root and branch,” she said.

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 dedicate significant resources to having them tracked. That is no longer the case. Modern surveillance tools can track a person's every move, every transaction, every… It allows purchases, sales, and transfers of securities to be tracked at low cost and in large quantities, while powerful computer algorithms can process that information to reveal the personal and private details of each individual. “A person's financial life and investment strategy,'' the complaint states.

“This class action complaint alleges the SEC's shocking overreach of power to impose dystopian surveillance, unsuspected seizures, and actual and potential searches on millions of American investors. I object.”

Little told Fox News Digital that the SEC collects “all transaction information for every investor's trade from inception to completion” and stores it in a database, including 401(k) and 529 education funds. He said he was referring to the fund.

“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 that SROs pay, so every American who invests ends 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 has ever voted for this. ”

An SEC spokesperson told FOX News Digital that “the Commission has regulatory responsibilities consistent with the agency.”

In an op-ed published in the Wall Street Journal on Monday, former Attorney General William Barr wrote, “Even if the government seeks information about its citizens from banks, telephone companies, and other people with whom it does business, It's not freedom.” This is to clean it completely. ”

Barr said the core of the SEC's argument against the CAT program is that “investigations would be easier if they were not limited to gathering investor information on a case-by-case basis after suspected fraud.” He pointed out that this was the case.

“But the whole point of the Fourth Amendment is to make government less efficient by forcing it to jump too far when trying 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.”