Latest news with #ConsolidatedAuditTrail

Wall Street Journal
13 hours ago
- Business
- Wall Street Journal
The Gensler Surveillance Tax Goes Down
Gary Gensler is back in private life, but his legal losing streak as Chair of the Securities and Exchange Commission continues. On Friday an Eleventh Circuit Court of Appeals panel struck down a tax that his SEC sought to impose on investors to fund a government surveillance scheme. The SEC's Consolidated Audit Trail (CAT) is a classic example of government overreach that the Constitution intended to prevent. The Obama SEC used the stock 'flash crash' in 2010 as a pretext to create this electronic system to sweep up personal information on every stock trader and real-time information on their trades. Regulators claimed such a database would help investigate market manipulation, insider trading and fraud—never mind that Congress hasn't given the SEC authority for such a system. Or that the lack of one didn't impede the Justice Department from bringing criminal charges against the trader behind the flash crash. The Obama SEC handed off the job to build this system to stock exchanges and 'self-regulatory organizations' that supervise brokerage firms. After the cost for this system soared, Mr. Gensler and the Biden SEC sought to stick brokers and investors with the bill. The American Securities Association and Citadel Securities sued.
Yahoo
4 days ago
- Business
- Yahoo
US appeals court strikes down SEC rule on 'audit trail' funding
WASHINGTON (Reuters) -A federal appeals court on Friday struck down 2023 regulations adopted by the U.S. Securities and Exchange Commission on funding a comprehensive market surveillance system, finding that Wall Street's top regulator had not provided a sufficient basis for allowing stock exchanges to pass on its costs to their members, court papers showed. The unanimous decision represented another blow to SEC regulations adopted under the Biden administration, which faced concerted opposition from industry and Republican lawmakers. It was also a setback for the Consolidated Audit Trail, a repository of investor and transaction data meant to give regulators overarching visibility into U.S. market operations that has faced delays and obstacles for more than a decade. The American Securities Association and Citadel Securities, which brought the lawsuit, both hailed the outcome. The ruling "prevents a tax hike on every American investor who buys or sells a share of stock," ASA President Chris Iacovella said in a statement. The SEC said it was considering its next steps. "Before the court's decision, Chairman Atkins directed SEC staff to undertake a comprehensive review of the CAT," said a spokesperson, referring to commission chief Paul Atkins. Over the objections of its Republican members, the SEC in 2023 split the operating costs among buyers, sellers, and exchanges. Officials said at the time this would divide costs evenly but also allow exchanges several years to recoup hundreds of millions already spent. This drew stiff objections from the investment industry, which said it could be left paying an unfairly large share. The two Republicans are now part of the five-member commission's controlling majority. In an opinion for a three-judge panel of the U.S. Court of Appeals for 11th Circuit, Circuit Judge Andrew Brasher said that, because the SEC had not advanced a sufficient justification in deciding how the system's cost would fall on different actors in the marketplace, "we conclude that the 2023 Funding Order is arbitrary and capricious" and therefore in violation of federal laws governing the crafting of regulations. The appeals court sent the rule back to the SEC for further processing in line with the court's decision. The SEC mandated the CAT's creation in 2012 as a response to the "flash crash" of 2010 when major Wall Street indexes temporarily erased nearly $1 trillion in market value in a matter of minutes. Officials say it can allow regulators to spot market manipulation and have cited its data in enforcement actions. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data


Bloomberg
4 days ago
- Business
- Bloomberg
Citadel Securities Wins Case Over SEC Audit Trail Funding
Citadel Securities and a group of brokerage firms won a lawsuit against a funding plan for the Securities and Exchange Commission 's market-tracking database. A federal appeals court in Atlanta on Friday declared the funding plan for the so-called Consolidated Audit Trail invalid and sent it back to the SEC for review. It placed its decision on hold so the agency has time to conduct an economic analysis and 'reconsider the allocation of historical and prospective CAT costs.'
Yahoo
11-06-2025
- Business
- Yahoo
NCLA's King George III Prize Crowns Former SEC Chair Gensler 2024's Worst Civil Liberties Violator
Washington, DC, June 11, 2025 (GLOBE NEWSWIRE) -- The Administrative State's biggest abuser of civil liberties in 2024 was former Securities and Exchange Commission Chair Gary Gensler! After weeks of online voting for the New Civil Liberties Alliance's Fifth Annual 'King George III Prize,' Gensler defeated 31 other rights-violating bureaucrats in a campaign on social media. The 'winner' was announced last night at an event in Washington, DC. Gensler earned the Prize in part for overseeing construction of SEC's 'Consolidated Audit Trail' ('CAT'), the largest government-mandated mass collection of personal financial data in American history. Without any statutory authority, SEC is forcing brokers, exchanges, clearinghouses and alternative trading systems to capture and send detailed information on every investor's trades in U.S. markets to a centralized database. NCLA is suing to stop the CAT in our Davidson, et al. v. Gensler lawsuit. Gensler also continued SEC's illegal 'Gag Rule' that forbids every American who settles a regulatory enforcement case with the agency from even truthfully criticizing their cases in public for the rest of their lives. NCLA's Powell, et al. v. SEC case aims to overturn the 'Gag Rule.' NCLA also presented the National Center for Public Policy Research with our George Washington Award for Client Bravery last night. NCLA represented NCPPR in the lawsuit against SEC that persuaded the U.S. Court of Appeals for the Fifth Circuit to overturn Nasdaq's 'Board Diversity Rules,' which sought to impose gender, race and sexual orientation quotas on corporate board membership for Nasdaq-listed companies. NCPPR is also a Plaintiff in Davidson v. Gensler and NCLA's client in our suit against unconstitutional SEC rules that would require public companies to disclose their climate-related business risks and mitigation procedures. NCLA honored Tim Harper and Marc Wheat of Advancing American Freedom with the George Washington Award for Best Amicus Curiae Brief, which they submitted in Davidson v. Gensler. Alexander J. Phipps of Antonin Scalia Law School took home the Student Note Award accompanied by a $10,000 prize to be split with the George Mason Law Review for his timely piece: 'Interpreting the APA's Triggering Provision for Formal Adjudication After Loper Bright.' It addresses implications of NCLA's historic overthrow of Chevron deference at the Supreme Court in Relentless, Inc. v. Dept. of Commerce and Loper Bright Enterprises v. Raimondo. NCLA released the following statements: 'For the fifth year, NCLA's King George III Prize highlights the true abusers of Americans' civil liberties—unelected bureaucrats. Former SEC Commissioner Gary Gensler is our newest 'winner' for overseeing one of the largest information grabs in our nation's history. His Consolidated Audit Trail program is something right out of George Orwell's 1984, with Big Brother tracking every stock market trade Americans make. Chair Gensler may have been unelected, but this award holds him accountable for violating the civil rights of millions of Americans.'— Karen Harned, Director of Engagement, NCLA 'This year's nominees for America's Worst Bureaucrat were a true rogues' gallery of civil liberties violators. But former SEC Chair Gary Gensler stood apart as most deserving of the ignominy the King George III Prize brings.'— Mark Chenoweth, President, NCLA ABOUT NCLA NCLA is a nonpartisan, nonprofit civil rights group founded by prominent legal scholar Philip Hamburger to protect constitutional freedoms from violations by the Administrative State. NCLA's public-interest litigation and other pro bono advocacy strive to tame the unlawful power of state and federal agencies and to foster a new civil liberties movement that will help restore Americans' fundamental rights. ### CONTACT: Joe Martyak New Civil Liberties Alliance 703-403-1111 in to access your portfolio
Yahoo
28-04-2025
- Business
- Yahoo
Insider Trader Gets Jail as SEC Reconsiders Tool That Caught Him
(Bloomberg) -- An Oregon retiree was ordered to spend a year behind bars for conspiring with a Nuveen LLC trader in a $47 million insider trading scheme — a case flagged by a controversial SEC tracking tool the Trump administration is considering reining in. Newsom Says California Is Now the World's Fourth-Biggest Economy At Bryn Mawr, a Monumental Plaza Traces the Steps of Black History US Cricket Deepens Bet on Texas With HQ Shift From California Los Angeles Downgraded to AA- by S&P Due to Budget Woes The Last Thing US Transit Agencies Should Do Now Alan Williams, 79, was sentenced Monday by a federal judge in Manhattan. Both he and the former Nuveen trader, Lawrence Billimek, pleaded guilty in 2023. Last May Billimek, 54, received a nearly six-year sentence for tipping off Williams to thousands of trades by Nuveen, a unit of TIAA that manages $1.3 trillion in assets. US District Judge Paul Gardephe noted that Williams had cooperated with the government against Billimek. The case was one of the first criminal cases brought based on data gathered by the Consolidated Audit Trail, a powerful database tracking as many as 500 billion trades a day that the Securities and Exchange Commission has been building for more than a decade. But Wall Street firms and Congressional Republicans have called for the CAT to be shut down, and new SEC Chairman Paul Atkins, who was sworn in last week, has also previously expressed doubts about it. Legal experts have said a scheme like Billimek and Williams' would not have been uncovered without CAT. Though major insider-trading cases have often focused on single-market events like merger announcements, the Nuveen one involved some 1,697 intraday equity trades made by Williams. The SEC found that he had a 97% 'win rate' over a five-year period, which had less than one-in-a-trillion odds of occurring randomly. But Citadel Securities LLC and the American Securities Association, a trade group representing regional financial institutions, sued the SEC over the CAT in 2023, claiming that the regulator can't operate such a tool without Congressional authorization. Citadel's suit received backing from Republican politicians, who've expressed concern that the CAT could be used to monitor investors' political and religious beliefs. With Donald Trump back in the White House, the debate over CAT is now within the SEC itself. Project 2025, the conservative manifesto for creating a more powerful Republican presidency, explicitly called for the database to be terminated. Atkins said during his confirmation hearing that the CAT needs to be reviewed, saying that the costs have 'ballooned' and that its mission 'has kind of veered off.' Even before Atkins' confirmation, the financial industry began lobbying the administration for changes to the database. The SEC has already exempted identifiable information such as names and birth years from being stored in the database. In February, the Securities Industry and Financial Markets Association, another Wall Street trade group, urged the SEC to pause fee collections from brokers related to the CAT. Along with the Nuveen case, the SEC has said the CAT was partly responsible for two other enforcement actions. A Federal Reserve bank examiner in November pleaded guilty to trading on confidential information about companies he supervised, and a Florida trader in December settled claims that he used 'spoof' orders to manipulate thinly-traded securities. 'Embarrassed and Ashamed' At his sentencing Monday, Williams apologized to the court, his family and Nuveen employees and clients. 'I'm embarrassed and ashamed,' he said. Williams faced as much as 75 years in prison, although white-collar criminals rarely receive the maximum penalty. Federal sentencing guidelines called for a punishment of 57 to 71 months behind bars. Billimek, who was responsible for routing orders based on Nuveen portfolio managers' decisions, admitted to tipping off Williams about Nuveen's planned trades in stocks, including Lululemon Athletica Inc. and Ulta Beauty Inc., as part of a complex plot that also involved the use of burner phones to hide their interactions from authorities. In one example provided by prosecutors, the scheme netted more than $55,000 in profits one day in August 2022 by shorting shares of Match Group Inc. ahead of substantial sales by Nuveen. Williams, a onetime head trader for Sutro & Co. in San Francisco, had asked Gardephe to keep him out of prison, calling himself an 'uncommonly decent and giving man' and noting that he suffers from advanced Parkinson's disease. The judge said a non-custodial sentence wasn't possible, given the 'blatant nature' of the conduct and the number of illegal trades. The case is US v Billimek, 22-cr-675, US District Court, Southern District of New York (Manhattan). As More Women Lift Weights, Gyms Might Never Be the Same Why US Men Think College Isn't Worth It Anymore Healthy Sodas Like Poppi, Olipop Are Drawing PepsiCo's and Coca-Cola's Attention Eight Charts Show Men Are Falling Behind, From Classrooms to Careers The Mastermind of the Yellowstone Universe Isn't Done Yet ©2025 Bloomberg L.P.