Lafayette Reporter

WASHINGTON – Members of the Senate Banking Committee and the Appropriations subcommittee on Financial Services and General Government (FSGG) are calling for an investigation into the potential risks, constitutional issues, and privacy concerns surrounding the Securities and Exchange Commission's (SEC) Consolidated Audit Trail (CAT). Sen. John Kennedy (R-La.) and Sen. Katie Britt (R-Ala.) have written to Gene Dodaro, Comptroller General of the U.S., requesting a report by the Government Accountability Office (GAO) on these matters.

"Since Rule 613 was adopted, the CAT has gone through several operational delays while market participants, SEC commissioners, and members of Congress have continued to raise concerns over the continually growing costs related to CAT implementation," explained Sen. Kennedy and Sen. Britt.

The senators highlighted the primary concern related to the CAT, which is the collection of personally identifiable information (PII) of every investor who trades a single share of stock on a U.S. exchange. This information will be stored in a vast database that could be vulnerable to cyberattacks, raising concerns about the privacy and protection of Americans' sensitive personal information.

Furthermore, the senators expressed their worries about the CAT's potential violation of Fourth Amendment protections against unreasonable search and seizures. They emphasized that the mandated production of certain information can infringe on individuals' privacy rights. Sen. Kennedy and Sen. Britt emphasized that many legitimate reasons exist for individuals not wanting their financial transactions regularly submitted to a government registry. They criticized the SEC for failing to address these concerns regarding the CAT's collection of PII.

Sen. Kennedy has previously taken action to protect investor privacy by introducing the Protecting Investors' Personally Identifiable Information Act, which prohibits the SEC from requiring brokers to submit investors' information to the CAT. He has also raised concerns with SEC Chairman Gary Gensler about the privacy and national security threats posed by the CAT.

The full letter requesting the GAO investigation and report can be found here.

For more information:

• Protecting Investors' Personally Identifiable Information Act