SEC Commissioner Decries CAT as an Unwarranted Invasion of Privacy

SEC Commissioner Hester M. Peirce welcomed the SEC's issuance of a concept release to review the Consolidated Audit Trail ("CAT"), but urged the Commission to go beyond cost and efficiency questions and confront deeper concerns over "liberty and privacy."

In her statement, Ms. Peirce acknowledged recent steps to reduce CAT costs and limit collection of personally identifiable information, but argued those measures left the core problem intact saying that "Americans should not have to prove their innocence by submitting their daily financial lives to comprehensive government monitoring." She said that CAT remains a government-mandated repository of every equity and options order and trade by every U.S. investor, accessible to the SEC and numerous SROs. She warned that no procedural safeguard can fully prevent a bad actor in government from misusing such a tool to target individuals for personal or political reasons.

Ms. Peirce said the "concept release gives the Commission, for the first time, a genuine opportunity to confront these fundamental concerns head-on," and called on commenters to consider whether a surveillance database of this scale is compatible with Americans' right to participate in markets without government monitoring of their every transaction absent suspicion of wrongdoing.