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(Bloomberg) -- An Oregon retiree was ordered to spend a year behind bars for conspiring with a Nuveen LLC trader in a $47 million insider trading scheme — a case flagged by a controversial SEC tracking tool the Trump administration is considering reining in.
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Alan Williams, 79, was sentenced Monday by a federal judge in Manhattan. Both he and the former Nuveen trader, Lawrence Billimek, pleaded guilty in 2023. Billimek, 54, received a nearly six-year sentence in May for tipping off Williams to thousands of trades by Nuveen, a unit of TIAA that manages $1.3 trillion in assets. US District Judge Paul Gardephe noted that Williams had cooperated with the government against Billimek.
The case was one of the first criminal cases brought based on data gathered by the Consolidated Audit Trail, a powerful database tracking as many as 500 billion trades a day that the Securities and Exchange Commission has been building for more than a decade. But Wall Street firms and Congressional Republicans have called for the CAT to be shut down, and new SEC Chairman Paul Atkins, who was sworn in last week, has also previously expressed doubts about it.
Legal experts have said a scheme like Billimek and Williams’ would not have been uncovered without CAT. Though major insider-trading cases have often focused on single-market events like merger announcements, the Nuveen one involved some 1,697 intraday equity trades made by Williams. The SEC found that he had a 97% “win rate” over a five-year period, which had less than one-in-a-trillion odds of occurring randomly.
But Citadel Securities LLC and the American Securities Association, a trade group representing regional financial institutions, sued the SEC over the CAT in 2023, claiming that the regulator can’t operate such a tool without Congressional authorization. Citadel’s suit received backing from Republican politicians, who’ve expressed concern that the CAT could be used to monitor investors’ political and religious beliefs.
With Donald Trump back in the White House, the debate over CAT is now within the SEC itself. Project 2025, the conservative manifesto for creating a more powerful Republican presidency, explicitly called for the database to be terminated. Atkins said during his confirmation hearing that the CAT needs to be reviewed, saying that the costs have “ballooned” and that its mission “has kind of veered off.”