Cracks in the CAT: Court Rules Against SEC’s Massive Surveillance Tool — SEC Roundup
[embedded content]Welcome to SEC Roundup, a bimonthly video series by former Securities and Exchange Commission senior trial counsels Nick Morgan and Tom Zaccaro, founders of the nonprofit advocacy group Investor Choice Advocates Network. The SEC’s sweeping Consolidated Audit Trail (CAT) — a surveillance tool designed to track every U.S. trade down to the individual investor — just got a major reality check from the 11th Circuit Court of Appeals. In this episode, Morgan is joined by frequent co-host Jennifer Schulp, director of financial regulation studies at the Cato Institute, and Chris Iacovella, CEO of the American Securities Association, to break down what the court’s decision really means. Together, they discuss: How the CAT evolved from a post–Flash Crash idea into a sprawling surveillance regime Why the court struck down the SEC’s funding model as “arbitrary and capricious” The broader constitutional questions now looming over CAT and SEC rulemaking The potential implications for investor privacy, major questions doctrine, and ongoing litigation in other circuits As challenges to SEC authority mount, this case could reshape the agency’s ability to expand its surveillance footprint — and raise the stakes for how market regulation gets made in the first place. “Nothing changes for 60...
