SEC Market Monitoring Tool Allowed to Operate During Litigation

The SEC’s new market surveillance tool can operate while it faces a legal challenge, a federal court said.

The enhanced recordkeeping under the Consolidated Audit Trail has some elements that can warrant a preliminary injunction, but maintaining the integrity of a tracking system requires holding off until proper relief could be fashioned, Judge Alan D. Albright said.

The CAT requires broker-dealers, exchanges, and clearing firms to report real-time US equity and options trading data. Critics, including cryptocurrency groups and 19 states represented by Republican attorneys general, argued the tool would allow the SEC to spy on American trading activity, ...