The Securities and Exchange Commission unconstitutionally mandated the seizure of data of every purchase or sale of securities in the U.S. markets, a lawsuit filed Tuesday in a Texas federal court alleged.
The lawsuit, Davidson v. SEC, challenges the Consolidated Audit Trail, or CAT, which the SEC has been quietly working to implement for over a decade. Here’s what you need to know about CAT and the lawsuit.
Decade in the Works
CAT’s origins date back to 2010 and the Obama administration. That year, under the guise of preventing another “flash crash,” in which market indices dropped some 15 percent before quickly rebounding, the SEC first promulgated Rule 613. That rule directed the creation of CAT, a database that, as the SEC explained in
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