NCLA Files Lawsuit Accusing SEC of Illegal Surveillance of Stock Market Investors

The New Civil Liberties Alliance (NCLA) has filed a lawsuit against the Securities and Exchange Commission (SEC) alleging that the government agency is illegally collecting data on every American citizen who invests in the stock market. The lawsuit filed on Tuesday in the Western District of Texas claims that the SEC’s “Consolidated Audit Trail” (CAT) program collects massive amounts of personally identifiable data on Americans by forcing brokers exchanges clearing agencies and alternative trading systems to capture and turn over detailed information about every investor’s trades into a centralized database.

According to the NCLA this effort has been undertaken without congressional authorization and violates Americans’ Fourth Amendment right protections against unreasonable government search and seizure of private information. The CAT program which was created under former President Barack Obama with bipartisan support within the SEC is a self-appropriated multi-billion-dollar fund with the funding coming from a variety of fees collected by the agency through investment transactions.

NCLA senior litigation counsel Peggy Little explained “By seizing all financial data from all Americans who trade in the American exchanges SEC arrogates surveillance powers and appropriates billions of dollars without a shred of Congressional authority — all while putting Americans’ savings and investments at grave and perpetual risk.”

Little further told Fox News Digital that every piece of “trade information on every investor’s trades from inception to completion” is collected and stored in the SEC’s database including information about Americans’ 401(k) or 529 Education Fund. She added “And there is simply no law that permits them to do that and the Fourth Amendment forbids them to do that.”

The NCLA declared in its lawsuit that CAT is “the greatest government mandated mass collection of personal financial data in United States history.” The lawsuit noted “Historically a government that wished to track its citizens had to devote large resources to having them followed. That is no longer the case: modern surveillance tools enable mass tracking of individuals’ every movement every transaction every purchase sale or transfer of securities at low cost while powerful computer algorithms can process that information to reveal personal and private details of each person’s financial life or investment strategy.”

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