Wednesday, July 24, 2024

Kennedy: The SEC’s Consolidated Audit Trail is a disaster waiting to happen

by BIZ Magazine

 WASHINGTON – Sen. John Kennedy (R-La.) penned this op-ed in the Washington Examiner warning that the SEC’s Consolidated Audit Trail (CAT) places the private information of 158 million American investors at risk. He urges his colleagues to join him in prohibiting the SEC from collecting information on every transaction that investors make and in requiring the SEC to delete the information it has already gathered.

Key excerpts of Kennedy’s op-ed include:

“The Securities and Exchange Commission is supposed to protect investors, not stalk them. However, under a new regulation, the SEC has paved the way for the federal agency to follow an investor’s every move.

“Here’s just a bit of the information the SEC is forcing brokers to fork over: their customers’ full names, birth years, addresses, which stocks they bought, which stocks they sold and when those transactions occurred. The SEC never had this level of access to personally identifiable information previously. The brokers would often have to store the information, and then the SEC could request the information for investigations. Now, the SEC wants all this information directly. In its own words, the SEC wants to ‘efficiently and accurately track all activity throughout the U.S. markets.’ Every single transaction.

“The SEC stops just shy of asking each investor to name their middle school crush before it receives all this customer information and stuffs it into one massive government-owned database called the Consolidated Audit Trail. The CAT is a ticking timebomb of sensitive personal information that hackers cannot wait to detonate.”

“The SEC’s disregard for privacy is as dangerous as it is un-American. That’s why I introduced the Protecting Investors’ Personally Identifiable Information Act, a bill that would prohibit the SEC from forcing financial institutions to turn over every investor’s personally identifiable information and require the SEC to delete any information it has gathered since the agency implemented the rule.

“Roughly 158 million Americans invest in the stock market. The CAT is a privacy and financial disaster waiting to happen. My colleagues in Congress should join me in working to shut down the CAT and restore the privacy of American investors.”

The full op-ed is available here.

Text of the Protecting Investors’ Personally Identifiable Information Act is here.  

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