On March 15, it was reported that Allison Herren Lee will step down as a commissioner at the U.S. Securities and Exchange Commission (SEC). During her tenure, Commissioner Lee, who also served as the Acting Chair of the agency in 2021, showcased a strong commitment to the SEC’s highly successful whistleblower program.
“Commissioner Lee was a vocal whistleblower advocate with incredibly strong principals throughout her tenure at the Commission,” said Siri Nelson, Executive Director of the National Whistleblower Center (NWC). “Working with Commissioner Lee and her staff has been a highlight of NWC’s ongoing engagement with the Commission and she will be missed.”
Lee was sworn in as an SEC Commissioner on July 8, 2019, after unanimous confirmation by the Senate. She previously served on the staff of the SEC for over a decade in a variety of different positions, such as Senior Counsel in the Division of Enforcement’s Complex Financial Instruments Unit.
During her time as an SEC Commissioner, Lee repeatedly voiced her support for the whistleblowers and the SEC Whistleblower Program in particular. In September 2020, she stated that whistleblowers “display extraordinary bravery to expose fraud and wrongdoing, and to shine light in some very dark places. She added that “in doing so, they reinforce our fundamental values – that the rule of law matters, and no one is, or should be, above the law.” At the time, Lee also stated that “[s]ince its inception, the Commission’s whistleblower program has enabled us to identify and pursue fraudulent conduct, ongoing regulatory violations, and other wrongdoing that would otherwise have gone undetected.”
Notably, Lee voted in opposition of 2020 rule changes to the SEC Whistleblower Program. In her dissent, she claimed that “[o]ur program today is working well…What is needed is a thoughtful and limited set of amendments to our rules to enhance efficiency and transparency, without detracting from what makes our program such a success. Unfortunately, that is not what this rule offers. Instead of fixing what is broken, we instead run the risk of breaking what works.” Lee raised concerns with the rule changes which echoed concerns raised by whistleblower advocates.
In her dissent, Lee stated that “[t]he principal reason that I find myself unable to support this rule, despite trying very hard to reach consensus, is because of the treatment given to the central issue of the Commission’s discretion to consider the dollar amount of an award in making award determinations.” According to Lee, the SEC removed a highly controversial proposed rule to cap large awards because it determined that it already has the authority to reduce awards due to their size, and that a new rule was not necessary. Lee opposes the position that the SEC has this authority due to the harm it could cause to the whistleblower program. As whistleblower advocates have argued, reductions to large whistleblower awards could be a disincentive to potential whistleblowers, particularly high-ranking and well-paid officials, and undermine the deterrent effect of the program.
The timeline for Lee’s departure is not set. According to The New York Times, Lee “will remain after her term ends in June if a replacement isn’t confirmed, though she is eager to begin a visiting professorship in Italy that she delayed to become a commissioner.”
“On a personal level, I have a deep admiration and respect for the Commissioner,” stated Nelson. “It has been a pleasure to work with her and I deeply appreciate Commissioner Lee’s clear thinking, openness, and generosity of spirit. She is an inspiration, and I look forward to seeing what comes next.”
SEC Commissioner Allison Herren Lee to Step Down