Paul Atkins, Scott Bessent Should End Warrantless, Lawless Surveillance

Left: Paul Atkins, SEC commissioner from 2002 to 2008, founded Patomak Global Partners in 2009, serving banking, trading, and cryptocurrency clients. (AFP pic), Right: Scott Bessent (AP pic)

​Paul Atkins, Donald Trump’s nominee to head the Securities Exchange Commission, will have a chance to roll back big expansions of the federal surveillance state within his first few days on the job.
 
Atkins can do this because outgoing SEC Chair Gary Gensler has pioneered new territory by using his agency to expand the financial surveillance of the American people without clear statutory authorization. The SEC under Gensler has made use of a program called the Consolidated Audit Trail, a database that collects not just investors’ trades, but also the personally identifiable information of 100 million U.S investors in a database run by an agency with a record of vulnerability to hackers.
 
This surveillance is based not on a law, but on SEC’s Rule 613, which was originally meant to respond to the 2010 “flash crash.” Never one to let a crisis go to waste, Gensler expanded what was meant to be a fix to a technical glitch and instead turned it into a national surveillance program. SEC’s Rule 613 now requires self-regulatory organizations, like private stock exchanges, to collect details about private trades on a U.S. exchange. Consequently, some 3,000 federal employees have access to the confidential data of America’s private investors.
 
The SEC under Gensler has also fined 26 financial firms almost $400 million for failing to track the private communications of their employees on their personal phones. Most financial firms already enforce policies that prohibit their employees from using their personal devices and messaging apps like WhatsApp for business. But until now, it was not the business of an employer to force employees to hand over their personal phones for inspection.
 
Perhaps Paul Adkins, as the new SEC Chair, will work to quickly undo Gensler’s handiwork and return a modicum of financial privacy to the American people.
 
President-elect Trump’s nominee as Treasury Secretary, Scott Bessent, has a similar chance to undo bureaucratically conjured surveillance. He can do this by ending the department’s Financial Crimes Enforcement Network’s “beneficial ownership” form, which threatens Americans with prison time and a $10,000 fine if they fail to file this form listing all the owners of their small businesses.
 
There is a lot of warrantless surveillance conducted by the federal government that can only be changed by law, from the purchasing of Americans’ personal data by the IRS, FBI, and many other federal agencies, to the expansion of the “Make Everyone a Spy” law to enable the NSA to force millions of small businesses that provide Wi-Fi to customers to turn over the communications of their customers. Those are heavy lifts that will take considerable effort by Congressional reformers to change.
 
But the SEC and FinCen items are low-hanging fruit. Scott Bessent and Paul Adkins should pick them as soon as possible.

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