Jefferson Reporter

U.S. Senators Katie Britt (R-Ala.), Tom Cotton (R-Ark.), and 12 of their Congressional Republican colleagues have sent a bicameral letter to Securities and Exchange Commission (SEC) Chair Gary Gensler, urging the immediate suspension of recently effective rule filings tied to the Consolidated Audit Trail (CAT).

The letter warns that the SEC’s decision to allow these filings to proceed without proper oversight is an affront to investors and endangers the impartiality of the judicial process.

“As members of Congress and Amici Curiae in these cases, we have a vested interest in ensuring that the Commission adheres to its statutory authority. The CAT poses profound risks to Americans’ individual liberty and personal privacy. Moreover, if a significant new tax is levied on American investors, the Courts must be afforded an opportunity to conduct a fair and impartial review,” wrote the lawmakers.

Senators Tim Scott (R-S.C.), John Boozman (R-Ark.), Kevin Cramer (R-N.D.), Pete Ricketts (R-Neb.), Steve Daines (R-Mont.), Jerry Moran (R-Kan.), Bill Hagerty (R-Tenn.), John Kennedy (R-La.) and Representatives French Hill (R-AR-02), John Rose (TR-TN-06), Steve Womack (R-AR-03), and Alex Mooney (R-WV-02) also co-signed the letter.

Last October, Senators Britt and Kennedy sent a letter to Gene Dodaro, the Comptroller General, requesting that the Government Accountability Office investigate potential risks, constitutional issues, and privacy concerns raised by the SEC’s Consolidated Audit Trail.

The full text of the new letter states:

"Chair Gensler,

We write to express our concerns that the Securities and Exchange Commission has not suspended the most recent immediately effective rule filings to establish fees related to the Consolidated Audit Trail. As you are aware, the legality of the funding model underpinning these filings as well as the CAT itself are being reviewed in the Fifth and Eleventh Circuit Court of Appeals.

As members of Congress and Amici Curiae in these cases, we have a vested interest in ensuring that the Commission adheres to its statutory authority. The CAT poses profound risks to Americans’ individual liberty and personal privacy. Moreover, if a significant new tax is levied on American investors, the Courts must be afforded an opportunity to conduct a fair and impartial review.

The Commission has allowed for withdrawal of suspended fee filings followed by refiling nearly identical ones, which effectively overrides its previous suspension and enables immediate imposition of CAT fees with minimal notice to industry participants. The Commission must suspend CAT fees in order to allow market participants an opportunity to comment on these filings and allow legality review through judicial processes.

Thank you for your prompt attention to this matter."

Sincerely,