The SEC’s vast trove of data from market participants helps ensure market integrity and prevent fraud, the lawmakers noted. “Improper access to this sensitive information could have disastrous consequences for the stable functioning of the US capital markets,” they wrote in a letter to Uyeda.
House financial services ranking member Maxine Waters and subcommittee on capital markets ranking member Brad Sherman, both Democrats from California, warned in the letter that Doge, an initiative created by President Donald Trump to slash costs and reduce the number of government employees, and its head Elon Musk, could use data from the agency to front-run investment decisions made by mutual funds, money market funds and exchange traded funds.
Through the SEC, Musk could also get access to non-public market data, such as pre-initial public offering filings, merger and acquisition information, and non-public information on Form N-Port, to then use for personal advantage, Waters and Sherman wrote.
If those associated with Doge were to use non-public trading data in the Consolidated Audit Trail in such ways, it could lead “to a loss of investor confidence, market instability and potentially significant economic repercussions — including the collapse of our financial markets and individual retirees’ nest eggs”, the Democratic lawmakers wrote.
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