Labaton Launches Whistleblower Practice with Former SEC Acting Chair Allison Herren Lee

Last month, Labaton Keller Sucharow announced the launch of its Whistleblower Representation Practice, led by former SEC Acting Chair and Commissioner Allison Herren Lee and former SEC Senior Counsel Andrew Feller. 

“Establishing a dedicated whistleblower practice is a natural extension of our mission to protect investors, promote corporate accountability, and strengthen the integrity of the financial markets,” said Eric J. Belfi, Chairman of Labaton Keller Sucharow. “Allison and Andrew have helped shape the SEC’s enforcement priorities and whistleblower framework from the inside.  Combined with our decades of experience investigating complex fraud and litigating high-stakes matters, we are creating one of the nation’s premier practices for whistleblowers seeking trusted counsel and exceptional advocacy.”

Allison Herren Lee served as an SEC Commissioner beginning in 2019 and was appointed Acting Chair of the Commission in 2021. During her tenure, she championed stronger whistleblower protections, greater individual accountability for securities law violations, enhanced market transparency, and elevated the Commission’s focus on corporate governance.  With more than two decades of experience in securities law, Lee has represented whistleblowers in matters involving securities, commodities, banking, capital markets violations, accounting, and financial reporting.  

As the only former SEC Commissioner and Acting Chair now representing whistleblowers in private practice, Lee brings a rare perspective on how enforcement decisions are made and how whistleblower submissions are evaluated.

“Whistleblowers play an indispensable role in protecting investors and preserving confidence in our markets,” said Lee.  “Now more than ever, individuals who come forward need experienced advocates who understand both the regulatory process and the significant personal risks involved. Labaton’s reputation for excellence in handling high-stakes matters makes it the ideal platform to advocate for whistleblowers. I’m excited to build this practice and give them the resources and unwavering advocacy they deserve.”

Andrew Feller brings more than 25 years of legal experience, including 15 years with the SEC’s Division of Enforcement, where he served as Senior Counsel. He also served as Principal Enforcement Counsel and Senior Policy Advisor to Commissioner Lee and was a founding member of the SEC’s Complex Financial Instruments Unit.  

What is your practice going to be at Labaton?

“All whistleblower representation,” Lee told Corporate Crime Reporter in an interview last week. “I and my former SEC colleague Andrew Feller, we are the co-chairs of the whistleblower representation group here at Labaton. We represent whistleblowers. We help them figure out whether they have something that law enforcement might be interested in. If we do have something, we will put a submission together, submit it on their behalf so they can remain anonymous.” 

“We then assist with the investigation, including representing our clients in interviews and the like, and then if a case gets brought, we apply for an award on behalf of our client. That’s the life cycle of a case.”

You were appointed by President Trump. You served under President Biden. Could you explain for our readers the makeup of the SEC Commissioners, Republican versus Democrat, and how it works?

“Under the statute, there are five commissioners – one of them is chair. The statute says that the commission may not have more than three commissioners of one political party at a time, and that it is designed so that there is a bipartisan commission at all times, which you may know we don’t have right now.” 

“If there’s a Democrat in the White House, you’ll see three Democrats most for the most part, and two Republicans, and then the reverse is true when there’s a Republican in the White House. There are a few little nuances to that, and some people are independent.” 

“You’re supposed to have a five-person commission, and it’s supposed to have no more than three from any one party. I am a Democrat, and I was appointed by Trump because that is the norm, or was the norm during the first administration. The President chooses two people from the other party, and I was one of those two.”

He hasn’t filled the two Democratic slots during his second administration. Why not? This time around, there are no Democrats, and therefore there’s no real debate within the commission between differing points of view.

“It’s a precarious situation for the agency to be in. It was designed to be a bipartisan agency and to act largely on consensus. You’re going to get better, more solid, more lasting regulation out of a bipartisan commission rather than one that kind of swings more extremely when the administration changes.” 

“That’s difficult for markets. Markets need predictability, and you don’t get that when you have political instability like we do right now. It’s a very difficult situation, and it’s not good for investors. It’s not good for issuers. It’s not good for capital markets. Period. We’re seeing a very active SEC, but there are no dissenting voices. There’s no one inside to negotiate with.” 

“It’s all kind of going one way, and right now that one way appears to be against investor interests, which is very unfortunate.”

When it comes to the whistleblower program at the SEC, everything is down. The payments, the cases are down. The denials are up. The whistleblower awards are down. That necessarily wasn’t necessarily the case in Trump one. What do you think is going on there?

“I’m going to let the SEC speak to that more directly. The chair, Paul Atkins, has evinced in the past a level of concern, if you will, about whistleblowers and the whistleblower program. So I’m not surprised to see the decline for now, but I’m hoping that over time we’ll see it being restored. But he’s on record with his views about whistleblowers more broadly and the program at the SEC. And so yes, we have definitely seen a decline, not just in whistleblower rewards, but as you point out, also in enforcement period.”

There are two distinct kinds of whistleblower programs. One is the SEC, CFTC, IRS kind, where the whistleblower reports something to the SEC or one of those agencies, and then it’s sort of out of the whistleblower’s hands. The agency decides whether or not to bring a case, and if there’s an award, the whistleblower gets a percentage. 

Then there’s the False Claims Act kind of case where the whistleblower is more in charge of the case. Is your practice going to be both of those kinds of cases, and how will it split?

“As of now, we are not doing the False Claims Act cases. We might, in the future, decide to expand into that space. But as you note, it’s a very different approach because the whistleblower has to file a case in federal court, and then you wait and see whether justice will take over the case or not.” 

“So it’s a very different kind of approach and practice. It’s all aimed at the same thing, although again in the False Claims Act cases, there has to be fraud against a federal entity of some sort, whereas these other programs are much broader. But it’s a lucrative space, and maybe one day we’ll branch into that. We’ll have to see.”

This may sound like an obnoxious question, but it’s not meant to be. If you are just reporting to the SEC, and then you put your feet up on the desk and wait and see what the SEC does – what kind of law practice is that?

“The answer is the value added that we bring. We have to triage just hundreds of submissions that people send in. We have a pretty big intake program – so we have to go through that, figure out what makes sense, figure out whether there’s a credible case and enough credible evidence to put something together. And Andrew and I both, having spent years working as enforcement attorneys and working with whistleblowers, know exactly what kinds of cases, what a case needs to look like when it lands on the SEC staff attorney’s desk.” 

“The first thing we do is put together a thoughtful and credible submission, using all the facts that our clients bring to us, all the evidence that they bring. We put it together doing the legal analysis so that we make the work simple for the SEC law enforcement staff. And then if they’re interested and they start the investigation, we help there too. We’re active all throughout, answering their questions, running down evidence for them, getting our client and letting them interview our client. I wish it were what you described, where you just kick back and put your feet on the desk and wait, but it’s not. There are the intakes, the analysis, the preparation and submission of the documentation and the case, and then the ongoing assistance in an investigation.” 

“There’s a lot to be done, and when we finish, when an investigation is finished, and they do bring a case, then we have to make an application on behalf of our client. That’s also an extremely detailed and carefully thought out and researched submission. The life cycle of the case is long and very hands-on.”

Is your practice exclusively SEC, or will you also be filing with the other agencies who have similar whistleblower programs?

“It’s definitely not exclusively SEC. We have cases at the CFTC. We have FinCEN cases. I have a couple at the IRS too. So no, it’s not confined just to the SEC.”

When cases come in the door, what percentage of cases do you take, and how do you determine which cases you’ll be taking versus which you won’t?

“I don’t know if I could give you a percentage, but I can tell you that it is a very small percentage because again we get a lot of submissions. And this isn’t to say that the information people provide doesn’t implicate some kind of issue or problem.” 

“But what we have to do is figure out whether it rises to a level that we think it would get investigated at whatever agency we submit to. For the SEC, we know instinctively what would or  wouldn’t interest the agency, and we review their priorities.”

“We watch their cases as they come out, so we know what types of cases they’re looking for. The other key component is understanding what backs up the allegations. So if someone comes and says – here’s what I think is going on, but they don’t have anything to back it up, they don’t have, or they don’t have enough to back it up, then we probably can’t go with it. You have to be able to show something more than just – I suspect there’s foul play.” 

“You have to be able to say – there’s the document, here’s where you can find it. We have to sift through quite a bit of information and then figure out which agency or agencies – sometimes it’s more than one may be relevant – and how strong is the evidence? How well does it fit the priorities that we know are in place at that particular agency?” 

When you go to SEC headquarters, is there an office with a sign on the door that says SEC Whistleblower Office?

“There is an office of the whistleblower at the SEC. It’s well run and has been in place since Dodd Frank. The head of the SEC whistleblower office is Jonathan Carr.”

Do you think that if the Democrats retake the Congress here in a couple weeks, things will change at the SEC?

“I do hope that regardless of what happens in the elections this fall, that we will see some Democratic commissioners appointed. The way the statute reads, they’re supposed to rotate the appointments, and one of the Republican commissioners just stepped down. I think it was last week, so under the law, they can’t reappoint another Republican without appointing a Democrat. So I do hope we’re going to see that, regardless of what happens in the elections, and I hope and expect that we will, but it remains to be seen.” 

As to what kind of press a Democratic controlled Congress can put on the SEC – the House Financial Services Committee holds the purse strings at the SEC. That’s where the budget comes through. So they do have some levers that they can pull, and they can hold hearings. They can do any number of things that could potentially change in some ways, the course of what’s occurring at the SEC, and we’ll see if that’s what they decide to do.”

What’s the timeline from the time a case comes in the door to, let’s say, in a successful case, when the case is resolved? How long does it take?

“Once we make a decision to take a case, we try to get a submission within maybe a month or two or three months, depending on the complexity of the matter. Then, of course, it’s out of our hands in terms of waiting to see if the agency takes it up.” 

“We know a lot of attorneys at the SEC, and we know who might be interested in what cases, so we also send them to cases directly to those attorneys. That’s in addition to submitting them through the whistleblower portal.”

“Then it might take the agency anywhere from immediately to a year to make a decision as to whether they’re going to pick up a tip and investigate it. But some investigations can last a couple of years.”   

“Then the next piece of that is the application for a whistleblower award. That too can take quite a bit of time to kind of get through all of the different procedural hurdles. At the end of the day, it’s a pretty long life cycle from beginning to end for whistleblowers.”

A group of law professors has started something called the Shadow SEC to pressure the SEC to do the right thing, and I’ve interviewed three of them: John Coffey, Joel Seligman, and John Coates. And what I found out from those interviews is there are very few former SEC staff who are also speaking out about the direction of the SEC under the second Trump administration, primarily because they have a practice before the SEC and they don’t want to offend the people they’re dealing with. There are many former staffers who are really upset by what’s happening but can’t speak out.

“I don’t know about people’s individual views and approaches to that. I do know that there are a lot of former staffers who are disappointed with the direction of the agency, and it’s one of these places where people develop a loyalty to the agency and mission.”

“It has always been staffed by deeply talented lawyers, people who are very public interest oriented. So it is troubling to see where the SEC is right now, and I have heard from many former colleagues about the direction of the agency.” 

“I don’t delve into their motivations for speaking out or not speaking out. There has been an unwillingness on the part of a lot of folks to speak up. But I do know for sure that there are lots of current and former SEC staffers who are discouraged and disappointed at the path the agency has taken.”

[For the complete q/a format Interview with Allison Herren Lee, 40 Corporate Crime Reporter 39(12), October 12, 2026, print edition only.]