ASA and Citadel Securities File Stay to Stop Tax on American Investors

WASHINGTON – The American Securities Association (ASA) and Citadel Securities LLC today filed a motion for stay and injunction in the United States Court of Appeals for the Eleventh Circuit to prevent the U.S. Securities and Exchange Commission (SEC) and self-regulatory organizations (SROs) from moving forward with the Consolidated Audit Trail’s (CAT) massive tax increase on every American investor while their challenge to the CAT’s legality is pending.

“We urge the Court to move expeditiously to prevent these monopolies from thwarting judicial review and taxing every investor who wants to participate in America’s stock market,” said ASA President and CEO Chris Iacovella.

“[The Court] should stay the Order pending resolution of petitioners’ challenge, thereby making clear that broker-dealers (and the rest of the industry) should not be on the hook for hundreds of millions in CAT fees until this Court has decided whether these novel transaction taxes—and the CAT itself—are lawful,” the challengers wrote in the filing. “Such relief is necessary to protect broker-dealers (and investors) from imminent irreparable harm and to ensure this Court’s review of the entire CAT funding structure is not frustrated.”

“The Commission and the SROs that administer the CAT on the SEC’s behalf have decided to disrupt a status quo that has been in place for nearly a decade,” the challengers wrote. “In a transparent effort to implement the challenged order before this Court has a chance to decide its fate, the SROs, with the SEC’s tacit blessing, have suddenly begun assessing hundreds of millions in CAT fees from broker-dealers, with the first invoices due as early as November 24, 2024.”

In October of 2023, ASA and Citadel Securities LLC filed a lawsuit against the SEC challenging the CAT. Last month, ASA sent a letter to the SEC requesting a stay of the SROs Rule 19b-4 filings related to the imposition of CAT fees.

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The American Securities Association (ASA) represents the retail and institutional capital markets interests of regional financial services firms who provide Main Street businesses with access to capital and advise hardworking Americans how to create and preserve wealth. ASA’s mission is to promote trust and confidence among investors, facilitate capital formation, and support efficient and competitively balanced capital markets. This mission advances financial independence, stimulates job creation, and increases prosperity. The ASA has a geographically diverse membership of almost one hundred members that spans the Heartland, Southwest, Southeast, Atlantic, and Pacific Northwest regions of the United States.