U.S. Securities Association warns Mythos threatens SEC’s major database security; SEC solicits public comments on the same day

The American Securities Association (ASA) said on Thursday that Anthropic’s next-generation artificial intelligence model, Mythos, could pose risks to traders and the broader financial system through a database maintained by the U.S. Securities and Exchange Commission (SEC).

The financial industry trade group warned that malicious actors could use AI tools to attack the so-called “Consolidated Audit Trail” system (CAT), carry out large-scale identity theft, expose individual trading positions, and amplify internal threats. The organization has long been an opponent of this controversial market tracking database.

ASA President Chris Iacovella wrote in a letter to U.S. Treasury Secretary Scott Besant, “CAT’s design is fundamentally incapable of defending against the real threats posed by Anthropic’s Mythos.” Besant also serves as chairman of the Financial Stability Oversight Council.

The ASA called on Besant to immediately halt the database’s collection of retail traders’ personal identity information, and urged destruction of personal trading data already collected by CAT. The SEC has previously used this data for market surveillance and suspicious trade investigations.

Sultan Meghji, former Chief Innovation Officer of the Federal Deposit Insurance Corporation and now CEO of AI company Frontier Foundry, said:

The worry is not just personal identity data—even CAT data that has been de-identified is a strategic asset, and AI has changed the economic threshold for exploiting this data. What previously required a nation-level team can now be done on a laptop with open-source tools. Mythos and similar systems push this ability further, enabling the integration and abuse of decades of market data at industrial scale.

According to reports last week, Besant and Federal Reserve Chair Powell have met with leaders of Wall Street's top banks to jointly discuss the capabilities of Mythos and its potential impact. The ASA said this meeting demonstrates that CAT is a significant cybersecurity vulnerability waiting to be exploited.

Last year, ASA teamed up with Citadel Securities to win a lawsuit successfully challenging CAT’s funding structure—which had previously required exchanges to finance the system’s operations. Since then, the SEC has begun to cut CAT’s operational costs, and the White House recently completed a review of a proposed regulatory measure intended to reconsider the scope of collected data.

On the same day the ASA sent its letter, the SEC solicited public comments on potential adjustments to CAT, and Chairman Paul Atkins stated that the agency must intensify efforts to advance reforms to this market tracking system. The concept solicitation widely seeks opinions on the fundamental issues of CAT.

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