Citadel Securities, ASA Sue SEC Over CAT

The American Securities Association and Citadel Securities have jointly petitioned the U.S. Court of Appeals for the 11th Circuit to review the Securities and Exchange Commission’s implementation of the Consolidated Audit Trail, “in response to widespread investor concerns about transparency, governance, costs and data privacy.”

The SEC, Citadel Securities and ASA asserted in a joint statement, “has overstepped its statutory authority and failed to address investor and industry concerns, leaving us no choice but to litigate.”

“ASA has, for years, been a leading advocate against the CAT and its collection of the personal and financial information of every American investor,” the group said.

ASA also applauded the bicameral introduction of the Protecting Investors’ Personally Identifiable Information Act, as well as letter to Congress from several state attorneys general urging the protection of investor privacy.

Speaking about the status of the Consolidated Audit Trail’s transaction database on Oct. 12, Financial Industry Regulatory Authority CEO Robert Cook said, “Mission accomplished.”

Cook also signaled that paring back the amount of information collected via CAT may be warranted.

“If you go back and think about what was the purpose of CAT — coming out of the flash crash, the SEC wasn’t in a position to reconstruct what happened; it didn’t have the data available,” Cook said during comments at the Securities Traders Association’s annual Market Structure Conference, held in Washington.

While there are “tons of problems that people raise with CAT,” Cook explained, “overall, the transactional database has been very successful in meeting those goals.”

As for “legitimate” privacy concerns related to CAT, Cook said, it’s “never too late to do the right thing. Just because we’re there now doesn’t mean we can’t say, ‘Maybe we went too far. Let’s go back and collect less data and really shrink the footprint of that.’”

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