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A new lawsuit alleges that the U.S. Securities and Exchange Commission (SEC) illegally tracked the data of Americans who invested in the stock market.
The lawsuit, filed last week in Texas by the New Civil Liberties Alliance, alleges that the agency illegally collected data through the Consolidated Audit Trail (CAT) program and that the program is unconstitutional.
The SEC is accused of storing and tracking data that includes “trading information about each investor’s trades from inception to completion,” which it says violates the Fourth Amendment.
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“By seizing all the financial information of every American trading on America’s stock exchanges, the SEC is usurping surveillance powers and appropriating billions of dollars without even a shred of congressional authority – all while jeopardizing people’s savings and investments Americans are at great and lasting risk,” said Peggy Little. NCLA's lead trial attorney told Fox News. “The Founding Fathers put rock-solid safeguards in our Constitution to prevent exactly these autocratic and dangerous actions. This CAT must be eradicated from all its roots.”
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According to Barron's, the CAT program is a trade reporting review system approved in 2016 that allows the SEC and the exchange to “track every order for a nationally traded stock from origination, modification, routing, and execution.”
The government's last budget approval for the CAT program was $200 million.
The class action lawsuit claims that “modern surveillance tools enable mass tracking of individuals’ every movement,” and the SEC can do this without spending additional time or resources collecting the desired data.
“Powerful computer algorithms can process this information to reveal personal and private details of any individual’s financial life or investment strategy,” the lawsuit says, according to Bloomberg.
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