‘This new illegal power grab must be stopped,’ said Scott Shepard, director of the Free Enterprise Project.
A new plan implemented by the Securities and Exchange Commission (SEC) will require all stock trades on U.S. exchanges to be monitored by the government. The SEC’s Consolidated Audit Trail (CAT) mandate aims to track all activity in the U.S. markets efficiently and accurately.
The plan, originally proposed in 2012 under the Obama administration, is now being resurrected under the Biden administration. However, it faced resistance from a group of lawyers and retired judges who see it as a violation of Americans’ civil rights.
The New Civil Liberties Alliance filed a complaint, calling the CAT mandate an unprecedented scheme to collect personal financial data without proper consent. Critics argue that the plan expands government surveillance, exceeds the SEC’s authority, and infringes on Fourth Amendment protections.
‘We believe it’s crucial to stop this illegal power grab,’ said Scott Shepard, who has joined the legal action against the CAT plan. He expressed concerns about the SEC potentially abusing the vast amount of financial information collected.
Despite criticism, the SEC claims it has the necessary authority to enact the CAT system. The program is intended to protect investors, prevent financial crimes, and investigate events like the 2010 Flash Crash.
Former Attorney General William Barr criticized the CAT plan, calling it a massive government database targeting Americans’ private activities. The plan allows thousands of government employees to monitor personal investment activities in real time.
Critics in Congress, like Sen. John Kennedy, have raised concerns about the SEC’s monitoring of investors’ every move. The costs of implementing the CAT program will be borne by brokerage firms and potentially passed on to investors.
Critics also worry about the security of Americans’ private financial information in government databases. Despite assurances from some lawmakers, concerns remain about the vulnerability of such data to hacking and theft. It is uncertain whether the new system would have facilitated the discovery of those crimes, but it is crucial for the SEC to possess the technology necessary to uncover such activities.
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