Texas Court Stays CAT Class Action, But Reporting Must Continue

On July 7, Judge Alan Albright of the US District Court for the Western District of Texas granted the Securities and Exchange Commission's (SEC) motion to stay a class action by industry groups that challenges the constitutionality and tracking capabilities of the Consolidated Audit Trail (CAT). The stay extends through January 15, 2026, by which date the SEC must report the results of its ongoing internal review of CAT governance, cybersecurity and cost‑allocation.

In its motion, the SEC referenced its current consideration of CAT National Market System plan amendments by self-regulatory organizations (SROs) that would prohibit the reporting of personal customer information to CAT entirely and eliminate all personal customer information stored in CAT. Importantly, CAT reporting obligations remain in full force during the stay. Judge Albright's order provides the SEC with time to complete its review but does not suspend the operation of CAT or alter compliance