The U.S. District Court for the Southern District of New York recently granted a motion for summary judgment dismissing a plaintiff’s SOX and Dodd-Frank whistleblower claims. The court ruled that the plaintiff failed to establish retaliation because:  (1) almost all of the plaintiff’s alleged protected activity did not allege shareholder fraud and therefore failed; and (2) the plaintiff did not offer any evidence establishing that a single protected complaint she made concerning the defendant’s SEC proxy statements contributed to her termination.  Yang v. Navigators Group, Inc., Case No. No. 13-cv-2073 (S.D.N.Y. Jan. 4, 2016).

Plaintiff Jennifer Yang (“Yang”) was employed from June 25, 2012 through November 2, 2012, as Chief Risk Officer for Defendant Navigators Group, Inc. (“Navigators”).  She was responsible for enterprise risk management oversight and tasked with improving the risk management function.  She alleged in her complaint that, in executing these responsibilities, she discovered: (i) Navigators’ previous risk assessment results were grossly underestimated; (ii) Navigators’ 10-K falsely represented that its reinsurance recoverable credit risk was monitored by a subcommittee; (iii) Navigators’ lacked proper risk control procedures; and (iv) Navigators’ SEC filings and presentations to rating agencies inaccurately reflected the its risk management program.  Yang alleged that shortly after she communicated her concerns to Navigators’ leadership, she suffered a retaliatory termination in violation of the whistleblower protection provisions in SOX and Dodd-Frank.

Navigators moved for summary judgment on her claims, asserting that she did not engage in protected activity and could not point to any evidence establishing that her termination was due to any protected activity. The Court mostly agreed, finding that, with the exception of Yang’s own “self-serving testimony,” there was no evidence supporting her allegation that she complained to her superiors about misrepresentations made by the defendant which were “illegal and constituted shareholder[] fraud.”  The Court, however, concluded that Yang did engage in protected activity when she complained to a supervisor about certain representations in Navigators’ SEC proxy statements.  Although Yang was terminated only two weeks after that complaint, the court concluded that a “purportedly terrible presentation” by Yang, which “occurred in the intervening time between her complaint and her termination”, weakened any inference that might otherwise have been drawn as a result of the temporal proximity between the two events.