The Consolidated Audit Trail will record your Social Security number and all your stock trades.
As an American, you have a right to privacy—unless you own stock. The Securities and Exchange Commission has created a centralized database to track the personal and financial information of every U.S. investor. Congress should immediately stop this unconstitutional power grab.
The scope of the Consolidated Audit Trail, or CAT, a regulation the SEC issued in 2016 but implemented only recently, is breathtaking and unprecedented. In the words of the SEC press release, the regulation instructs regulated financial institutions to identify “every order, cancellation, modification and trade execution for all exchange-listed equities and options across all U.S. markets.”
The SEC issued this rule in response to the 2010 “flash crash,” ostensibly to surveil markets. If the CAT stopped at that, it would have been a useful tool to protect markets from fraud and manipulation. But the commission decided to collect American investors’ personally identifiable information, such as account and Social Security numbers, and share it. The CAT data will be available to self-regulatory organizations, such as stock and options exchanges, and about 3,000 outside contractors as well as to the SEC itself.
Continue reading the entire piece here at The Wall Street Journal (paywall)
______________________
Mr. Stephens is chairman, president and CEO of Stephens Inc and a trustee of the Manhattan Institute. Mr. Reilly is chairman of the American Securities Association.
Photo by SAUL LOEB/AFP via Getty Images