Chinese Military Indicted in Equifax Breach Shows SEC Must Act to Protect Investors
There is no compelling government reason for the SEC CAT database to expose American investors to identity theft.
WASHINGTON – Following today’s announcement that a federal grand jury has indicted four members of the Chinese People’s Liberation Army for its involvement in the Equifax breach and stealing the personal data of 145 million Americans, the American Securities Association (ASA) called on the Securities and Exchange Commission (SEC) to learn from this and protect every American investor by removing retail investor personally identifiable information (PII) from the Consolidated Audit Trail (CAT) government database.
“The Chinese army was caught stealing the personal financial data of nearly half the American population and the SEC should take this as a reason not to consolidate the personal information of investors into a single database,” said ASA CEO Chris Iacovella. “Today’s unfortunate news is further proof that state-sponsors and other bad actors are working around the clock to harm Americans. Retail PII must immediately be removed from the CAT database. There is no compelling government reason for the SEC CAT database to expose American investors to identity theft.”
According to a nationwide Morning Consult survey, 72% of investors are not willing to put their personal information at risk in order to facilitate more insider trading cases, while 76% favor being allowed to ‘opt-out’ of having their PII collected under a system such as the CAT. There is growing momentum in Congress calling on the SEC to remove retail investor PII from the CAT. In July, a group of Senate Republicans sent a letter to the SEC highlighting the CAT’s national security risks. Leading members of the House Financial Services Committee sent a similar letter in April.
The collection of retail investor PII in no way bolsters the ability of the SEC to oversee equity markets more effectively as the Commission has brought over 387 insider trading cases since FY2011. ASA believes the CAT can surveil the marketplace and better understand market structure just as effectively by giving IDs to financial institutions, hedge funds, high-frequency and other large traders. Retail investors did not cause the flash crash.
ASA has been at the forefront of advocacy to remove retail investor PII from the CAT. ASA CEO Chris Iacovella recently penned an op-ed in The Hill titled “The National Security Risk No One Is Talking About.” To read our recent letter to the SEC, click here. To read our recent letter to the Senate Banking Committee, click here. To view a Morning Consult poll showing an overwhelming majority of American investors oppose sending their personal information to the CAT, click here.
ASA’s regional financial services companies work in communities across the country to create jobs, grow the economy, and increase prosperity for all Americans. The ASA exclusively represents the capital market and private client interests of its members and seeks to promote free market principles making it easier to access financial advice and capital. ASA members help Americans save for retirement, provide Main Street businesses with capital to grow, and advise hardworking Americans how to create and preserve wealth. For the latest updates follow @AmerSecurities and learn more at http://americansecurities.org/.