State financial officials in 23 states have fired off a letter to House Speaker Mike Johnson expressing strong opposition to a new Security and Exchange Commission program that grants 3,000 government employees real-time access to every equity, option trade, and quote from every account of every broker by every investor.
“Traditionally, Americans’ financial holdings are kept between them and their broker, not them, their broker, and a massive government database,” the state auditors and treasurers wrote. “The only exception has been legal investigations with a warrant." The state financial officers contend that the SEC's move undermines the principles of federalism by imposing a one-size-fits-all solution without considering the unique regulatory environments of individual states. They asked Speaker Johnson to support a bill sponsored by Rep. Barry Loudermilk (R-GA), the Protecting Investors' Personally Identifiable Information Act. This proposed legislation would restrict the SEC's ability to collect and centralize such vast amounts of personal financial data. As is so common with recent efforts at financial surveillance, the SEC justifies this data collection to combat insider trading, market manipulation, and to identify suspicious activities. Similar excuses are offered for the new “beneficial ownership” requirement that is forcing millions of Americans who own small businesses to send the ownership details of their businesses to the Financial Crimes Enforcement Network (FinCEN) of the U.S. Treasury. But such increased vigilance comes at the expense of the privacy of millions of Americans. The sheer volume of data accessible to government employees raises concerns about potential misuse and unauthorized access. “The Securities and Exchange Commission has been barreling forward with a new system – the Consolidated Audit Trail (CAT) – which tracks every trade an individual investor makes and links it to their identity through a centralized system,” Rep. Loudermilk said. “Not only is collecting all this information unnecessary, regulators already have similar systems that don’t easily match identities with transactions, but it also creates another security vulnerability and a target for hackers.” While the SEC assures lawmakers that strict safeguards are in place – given recent high-profile hacks and All the more reason for Speaker Johnson to give Rep. Loudermilk’s bill a big push on the House floor. Comments are closed.
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