On Friday, the Eleventh Circuit Court of Appeals rightly ruled in American Securities Association v. SEC that the funding structure of the Consolidated Audit Trail (CAT) violates the Administrative Procedure Act. The CAT, a massive data collecting effort that tracks every stock trade and matches it to personally identifiable information, is illegal in numerous ways. The CAT is funded by fees assessed against regulated entities, not by congressional appropriation, and Congress has never approved the CAT or its funding mechanism. The Eleventh Circuit’s decision, while an important win, affects only the CAT’s funding, not its massive collection of Americans’ personal data.
Another case, Davidson v. Atkins (formerly Davidson v. Gensler) challenges the CAT’s legality more broadly. That case has been put on hold while the SEC considers whether it will modify the CAT. AAF urges it to do so.
“As we argued in our amicus brief in Davidson v. Gensler, the CAT unconstitutionally collects Americans’ data and was created and is funded without Congressional approval,” said AAF General Counsel J. Marc Wheat. “We urge the SEC to dismantle the CAT and save American investors from spending hundreds of millions of dollars a year to fund the illegal CAT database.”
