NCLA Demands SEC Shutter Its Illegal Investor Data Dragnet, Urges Public to Speak out Against CAT

Re: Concept Release on Consolidated Audit Trail and Other Audit Trails and Data Sources

Washington, D.C., June 18, 2026 (GLOBE NEWSWIRE) -- The New Civil Liberties Alliance filed official comments today urging the Securities and Exchange Commission to permanently dismantle its unconstitutional “Consolidated Audit Trail” (CAT), the largest government-mandated mass collection of personal financial data in American history and an unprecedented cybersecurity risk. Without any statutory authority, SEC is forcing brokers, exchanges, clearing agencies and alternative trading systems to capture and send detailed information on every investor’s stock and other securities trades in U.S. markets to a centralized database, which the agency and private regulators can access forever. SEC Commissioners Hester Peirce and Mark Uyeda have called the CAT “a system that one would expect to find in a dystopian surveillance state, not the shining beacon for liberty and the free world.”

SEC currently seeks public comments due June 22 to help with a “comprehensive review” of the CAT, asking whether changes should be made to “better respond to … civil liberty, privacy and confidentiality concerns … and cybersecurity considerations.” That request asks: “Should the Commission eliminate the CAT…?”

Representing Dr. Erik Davidson, Mr. John Restivo, and the National Center for Public Policy Research, NCLA has been working to eliminate the CAT in its Davidson, et al. v. Atkins federal lawsuit, drawing support from 19 states, current and former government officials, research organizations, and advocacy groups. NCLA and its clients call on Americans to submit comments, demanding an end to this dangerous surveillance program. Because the CAT seizes private financial data from all Americans who buy or sell a stock without due process of law, it violates the Fourth and Fifth Amendments. By also forcing them to surrender to the government all data on their private decisions about how they invest or donate their stock, it runs roughshod over their First Amendment freedoms of association and expression as well.

SEC created the CAT without permission from Congress, so the program also defies the Constitution’s Vesting Clause, which assigns all lawmaking powers solely to Congress. Even though the cost to set up the CAT is more than SEC’s entire annual budget, SEC did not ask Congress for an appropriation. Instead, SEC has funded the CAT by requiring securities industry self-regulatory organizations, like FINRA, to pay for the costs of the program, costs that SEC’s own economist admits will pass along billions ultimately paid by the investing American public. This is both an unlegislated tax and a deadweight cost borne by American investors without any law approving such a costly, Orwellian scheme. Such agency self-appropriation ignores the Constitutional provisions that reserve tax and appropriations powers to Congress alone.

NCLA released the following statements:
“The American investing public needs to understand that the SEC has established—on its own authority and for its own enforcement convenience—a dystopian surveillance database that violates all investors’ civil liberties on an ongoing basis. American investors should file objections declaring their independence from this dangerous, costly and unconstitutional scheme.”
— Peggy Little, Senior Litigation Counsel, NCLA

“Yes, the Commission should eliminate the CAT. Nothing SEC can do will fix this irretrievably unlawful scheme. The daily damage it does to every American investor’s First, Fourth, and Fifth Amendment rights is outrageous.”
— Mark Chenoweth, President and Chief Legal Officer, NCLA

Submit comments to SEC here. For more information visit NCLA’s comments page here.

ABOUT NCLA
NCLA is a nonpartisan, nonprofit civil rights group founded by prominent legal scholar Philip Hamburger to protect constitutional freedoms from violations by the Administrative State. NCLA’s public-interest litigation and other pro bono advocacy strive to tame the unlawful power of state and federal agencies and to foster a new civil liberties movement that will help restore Americans’ fundamental rights.

Joe Martyak
New Civil Liberties Alliance
703-403-1111
joe.martyak@ncla.legal

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