In a recent development, a groundbreaking lawsuit has been filed against the U.S. Securities and Exchange Commission (SEC), accusing the agency of engaging in illegal surveillance of American investors in the stock market. The New Civil Liberties Alliance brought this lawsuit to light last week in Texas, alleging that the SEC has been unlawfully collecting data through the “Consolidated Audit Trail” program (CAT), which they claim violates the Fourth Amendment.
The SEC is accused of storing and tracking trade information from every investor’s transactions, sparking concerns about the invasion of privacy and constitutional rights. Peggy Little, NCLA senior litigation counsel, condemned the agency’s actions, stating, “By seizing all financial data from American exchanges traders, SEC arrogates surveillance powers and appropriates billions of dollars without Congressional authority.”
The CAT program, approved in 2016, enables the SEC to trace every order for a nationally-traded stock, providing a detailed audit system. Despite a budget of $200 million allocated for the program, the lawsuit claims that the SEC can use modern surveillance tools to track individuals’ every move without significant time or resources.
According to reports cited by Barron’s, the lawsuit highlights the dangers posed by powerful computer algorithms that can expose personal financial information and investment strategies. The lawsuit asserts that the SEC’s market surveillance is unconstitutional and poses a significant risk to individuals’ financial privacy.