SEC Names New Whistleblower Chief
On November 5, 2021, the SEC announced that Nicole Creola Kelly would take over as Chief of the SEC’s Office of the Whistleblower. The Office of the Whistleblower oversees the agency’s hugely successful Whistleblower Program, which has awarded about $1.1 billion to 226 individuals over the last decade. Over the same period, those whistleblowers have helped the SEC obtain roughly $5 billion in financial penalties from securities fraudsters and cheats. The program is a model for how whistleblowers can transform government enforcement when properly incentivized and protected.
Kelly replaces Acting Chief Emily Pasquinelli, who temporarily stepped into the role following the departure of longtime chief—and whistleblower champion—Jane Norberg. Norberg had a landmark run as chief, streamlining of the awards process, issuing numerous blockbuster awards, and vigorously defending the program from corporate attempts to muzzle whistleblowers. Norberg left big shoes to fill, but the agency has doubled down on its commitment to the Whistleblower Program since her departure.
Kelly appears poised to continue this trend. She has dedicated more than 20 years of her career to the SEC, including a prior stint at the Whistleblower Office. In a statement, Kelly noted that she has “witnessed firsthand both the critical impact that whistleblowers can have on our investigations and the many sacrifices they make in shining light on misconduct.” Likewise, Gurbir S. Grewal, the SEC’s Director of Enforcement, emphasized the “tremendous value” of the program and committed to working with Kelly to continue its success.
Kelly has a pressing first task: overseeing the SEC’s effort to roll back controversial amendments to the Whistleblower Program’s rules, which could have curtailed awards for whistleblowers. New SEC Chairman Gary Gensler has already directed the SEC staff to propose revisions to these amendments. How Kelly manages this early test will send a strong signal about her leadership of the program in the years to come.
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