Why Is the SEC Tracking Every Stock Trade?

In this episode of Unwritten Law, NCLA Senior Litigation Counsel John Vecchione is joined by Senior Litigation Counsel Peggy Little to discuss the SEC's Consolidated Audit Trail (CAT)—a massive government database that collects information on virtually every securities transaction made by American investors.The conversation centers on a new SEC request for public comments on the future of the CAT system, including the possibility of eliminating it altogether. Peggy explains why NCLA has long challenged the CAT, arguing that it creates serious constitutional, privacy, cybersecurity, and separation-of-powers concerns.The discussion explores how the CAT differs from traditional investigative tools such as the SEC's "blue sheet" process, why the database contains sensitive information about millions of Americans, and how cybersecurity breaches at government agencies raise concerns about concentrating so much financial information in a single location.John and Peggy also examine questions surrounding the CAT's funding mechanism, the role of self-regulatory organizations, and why NCLA believes Congress never authorized the SEC to create such a sweeping surveillance system in the first place.The episode concludes with a discussion of the SEC's public comment process and how ordinary Americans can make their voices heard on the future of the CAT.