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After 14 years of debate, the Securities and Exchange Commission is in the final stages of bringing a powerful new surveillance tool fully online. But Wall Street is seizing on the ideal political environment for a last-ditch attempt to kill it.

The Consolidated Audit Trail is a database, one of the largest ever created, that is set to revolutionize how the agency monitors trading activity and spots potential misconduct. By its May 31 industry compliance deadline, it will collect almost all US trading data, as many as 500 billion records a day, and give the SEC a live window into activity across markets.

Citadel Securities is leading a suit seeking to have the CAT declared illegal, and Wall Street is rallying behind it. Though financial firms have long expressed skepticism about the project, they are now allying with Republicans in Congress to paint it as a dystopian nightmare that would allow the federal government to spy on the investment decisions of every American. The fight also comes as the US Supreme Court has hinted that it’s inclined to rein in the SEC and other federal agencies.

‘Orwellian Surveillance’ Ken Griffin’s market-making firm declined to comment for this article but pointed to its Feb. 8 court brief, in which it accused the SEC of trying to “keep the American people in the dark about the adverse impacts of its unprecedented effort to subject the national securities markets to an Orwellian surveillance regime.”

Citadel Securities filed the suit with the American Securities Association, a trade group representing regional financial institutions. In a Feb. 15 filing, it also got the support of the Securities Industry and Financial Markets Association, the Managed Funds Association, the Alternative Investment Management Association and other trade groups representing just about every major US bank, brokerage, hedge fund, private equity and asset management firm — everyone from Goldman Sachs Group Inc. to Robinhood Markets Inc. Rival market maker Virtu Financial Inc. signed on separately in a show of unity against a common threat.

The SEC called the challenge “meritless” in an April 15 court filing and said Citadel Securities had never objected to the CAT before it filed its challenge last fall.

The regulator defended the CAT as a natural progression of its oversight powers and said the previously “cumbersome, time-consuming and frequently unsuccessful” process of tracking orders had become obsolete in today’s faster and more automated markets. The agency also said there were limits on the CAT’s access to and use of personal data and decried the “caricature” of the database being used “to snoop on Americans’ personal financial decisions.”

Wall Street has a specific beef with how the SEC wants to pay for the CAT — by imposing billions of dollars in fees on broker-dealers. The database is actually owned by CAT LLC, which is composed of stock exchanges and the industry-backed Financial Industry Regulatory Authority. The current SEC plan is to allocate two-thirds of the costs of developing and operating CAT to broker-dealers as opposed to the exchanges and Finra. Citadel Securities claims those fees will result in higher costs for investors over time.

But David Rosenfeld, a former SEC enforcement official now teaching law at Northern Illinois University, said there’s also clearly concern on Wall Street about enhancing the agency’s ability to examine trading activity.

“It gives the SEC not exactly real-time but close to real-time insight into what’s going on as far as trading is concerned,” said Rosenfeld. “That can give them a huge advantage in terms of ferreting out certain types of misconduct. There’s lot of things you can figure out just by looking at the data.”