A recent complaint claims that the Securities and Exchange Commission (SEC) is unlawfully gathering information on every individual in the United States who engages in stock market investment. The New Civil Liberties Alliance (NCLA) filed the lawsuit last Tuesday, April 16, in the district court for the Western District of Texas.

SEC Accused of Collecting Personal Information via Consolidated Audit Trail Program

According to the New York Post, the NCLA sued the SEC, asserting that the agency is gathering vast quantities of personally identifiable information through its Consolidated Audit Trail (CAT) program. The program requires brokers, exchanges, clearing agencies, and alternative trading systems to record and transmit comprehensive details of every investor's trades in the US market to a centralized database.

NCLA claims the agency violates the Fourth Amendment and Congress's authorization rules by searching for and seizing private data. The organization deems this "completely unlawful" and says it seriously risks Americans' financial data.

"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," Peggy Little, NCLA senior litigation counsel, said in a press release. She added that the CAT program must be removed entirely.

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Lawsuit Calls CAT the Greatest Government-Mandated Bank Record Collection in US History

In the complaint, CAT is characterized as the largest government-mandated bulk gathering of bank records in American history.

"Historically, a government that wished to track its citizens had to devote large resources to having them followed. That is no longer the case," the lawsuit states. It asserts that current surveillance methods enable widespread monitoring of individuals' transactions, while computer algorithms may expose personal financial and investment data.

Little told Fox News that the SEC records and keeps track of all investor transactions, including those involving retirement and education plans.

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