Supreme Court narrows geofence warrants; SEC fines Merrill $7.5M for surveillance lapses

The Supreme Court handed privacy advocates a meaningful win by ruling that geofence warrants—broad demands for location data on everyone near a crime scene—are protected by Fourth Amendment privacy rights. The decision stops short of an outright ban but imposes limits on law enforcement's ability to cast a dragnet over whole neighborhoods based on cell-tower and GPS data. TechCrunch called it a major victory; the narrowing principle is what matters.

The same day, the SEC fined Bank of America's Merrill Lynch $7.5 million for failing to flag enough suspicious activity in client accounts. The enforcement action targets the firm's anti-money-laundering surveillance program, a compliance obligation that sits at the intersection of privacy and policing. Merrill did not catch what it should have caught.

These cases form a bracket. One limits how much the state can vacuum up without probable cause. The other punishes a private actor for not vacuuming enough on the state's behalf. The tension is not new, but it is sharpening. Financial institutions are expected to act as deputized monitors while courts rein in direct government overreach.

The compliance cost of that gap falls on the intermediary. Merrill's $7.5 million is a rounding error for BofA, but it signals that the SEC is still enforcing the plumbing even as courts redraw the pipes. For firms operating in both payments and data, the ruling and the fine together clarify where the line is being drawn this quarter: less warrantless mass collection, more internal scrutiny of what you already hold.

Meanwhile, a Michigan judge blocked Kalshi from offering sports bets to state residents, a reminder that prediction markets still face state-by-state enforcement risk even as federal courts have opened the door to event contracts. The geofence ruling may offer Kalshi a privacy argument in future challenges, but for now the company is still fighting on jurisdiction and gaming law, not constitutional grounds.