Wiggins v. ING U.S., Inc. et al

Filing 77

RULING granting 47 Motion for Reconsideration ; denying 50 Motion to Dismiss; denying without prejudice 51 Motion to Stay; denying without prejudice 72 Motion to Stay. Signed by Judge Janet C. Hall on 12/15/2015. (Anastasio, F.) Modified on 12/15/2015 to edit text (Anastasio, F.).

UNITED STATES DISTRICT COURT
DISTRICT OF CONNECTICUT
EVA WIGGINS,
Petitioner,
v.
ING U.S., INC., et al
Defendant.

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CIVIL CASE NO.
3:14-CV-01089 (JCH)

DECEMBER 15, 2015

RULING RE: MOTION FOR RECONSIDERATION (DOC. NO. 47); MOTION TO
DISMISS (DOC. NO. 50); MOTION TO STAY (DOC. NO. 51); MOTION TO STAY
(DOC. NO. 72)
I.

INTRODUCTION
Currently pending before the court are a number of motions, brought by both the

plaintiff, Eva Wiggins (“Wiggins”) and the defendants, ING U.S., INC. (“ING”) and ING
Life Insurance and Annuity Company (“ILIAC”) (collectively, “ING”).
Wiggins has filed a Motion for Reconsideration (Doc. No 47), asking the court to
reconsider its Ruling (Doc. No. 42) (“Ruling”), in which the court dismissed Count II of
the Complaint (Doc. No. 1) (“Compl.”). Count II of the Complaint claimed that ING
violated The Dodd-Frank Act, 15 U.S.C. § 78u-6(h). ING has filed a Motion to Dismiss
(Doc. No. 50) the Amended Complaint (Doc. No. 43) (“Am. Compl.”). The Amended
Complaint contains only one count, consistent with the court’s Ruling on the first Motion
to Dismiss (Doc. No. 42), in which Wiggins claims that ING violated the Sarbanes-Oxley
Act (“SOX”), 18 U.S.C. § 1514a. In addition, ING has filed a Motion to Stay Pending
Arbitration (Doc. No. 51), asking the court to stay the case pending arbitration of the
SOX claim alleged in the Amended Complaint. Lastly, ING has filed a Motion to Stay
(Doc. No. 72), asking the court not to proceed until the Court of Appeals for the Second

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Circuit has decided ING’s appeal of certain portions of the Ruling. The court will
address each of these Motions separately.
II.

MOTION FOR RECONSIDERATION
“A motion for reconsideration should be granted only when the [movant] identifies

‘an intervening change of controlling law, the availability of new evidence, or the need to
correct a clear error or prevent manifest injustice.’ ” Kolel Beth Yechiel Mechil of
Tartikov, Inc. v. YLL Irrevocable Trust, 729 F.3d 99, 104 (2d Cir. 2013) (quoting Virgin
Atl. Airways, Ltd. v. Nat’l Mediation Bd., 956 F.2d 1245, 1255 (2d Cir. 1992). Wiggins
argues that the Second Circuit’s ruling in Berman v. Neo@Ogilvy LLC, 801 F.3d 145 (2d
Cir. 2015), which was decided after the court issued its Ruling, constitutes an
intervening change of controlling law and compels a different result than the one the
court reached in its Ruling. See Notice of Additional Authority in Support of Plaintiff’s
Partial Motion for Reconsideration at 1-2 (Doc. No. 57) (“Notice of Additional Authority”).
In Berman, the Second Circuit held that the tension between two parts of DoddFrank, specifically, section 78u-6(a)(6) of title 15 of the United States Code and
subdivision iii of section 78u-6(h)(1)(A) of title 15 of the United States Code, warranted
granting Chevron deference to the Securities and Exchange Commission’s (“SEC”)
interpretation of these sections. See Berman, 801 F.3d at 155. The SEC’s
interpretation of these sections, which is contained in SEC Rule 21F-2(b)(1), holds that
an employee “is entitled to pursue Dodd-Frank remedies for alleged retaliation after
[her] report of wrongdoing to [her] employer, despite not having reported to the
Commission before [her] termination.” Id. This court reached the opposite conclusion

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in its Ruling. See Ruling at 16-21. That conclusion is now untenable, in light of the
Second Circuit’s holding in Berman.
Accordingly, the court grants the Motion for Reconsideration. In light of Berman,
the court now holds that Wiggins is entitled to file a Second Amended Complaint, which
will include a Dodd-Frank claim, in addition to the SOX claim.
III.

MOTION TO DISMISS
In its Ruling, the court also dismissed Wiggins’s SOX claim, without prejudice,

because Wiggins “failed to allege a subjective belief that a relevant law violation
occurred.” Id. at 22. Wiggins subsequently filed the Amended Complaint, in which she
reasserts her SOX whistleblower claim. Pursuant to Rule 12(b)(6) of the Federal Rules
of Civil Procedure, ING has raised a number of arguments as to why the Amended
Complaint should be dismissed,
A. Legal Standard
A court reviewing a motion to dismiss under Rule 12(b)(6) takes all well-pleaded
“factual allegations of the complaint to be true and draw[s] all reasonable inferences in
the plaintiff’s favor.” Warren v. Colvin, 744 F.3d 841, 843 (2d Cir. 2014). Dismissal of a
claim is appropriate if, despite this favorable reading, the complaint fails to allege
“enough facts to state a claim for relief that is plausible on its face.” Bell Atl. Corp. v.
Twombly, 550 U.S. 544, 570 (2007). The requirement to allege “facts” means that “bald
assertions” and “merely conclusory allegations” do not suffice. Jackson v. Cnty. Of
Rockland, 450 F. App’x 15, 19 (2d Cir. 2011); see also Ashcroft v. Iqbal, 556 U.S. 662,
678 (2009). A complaint is “plausible on its face” if the facts that the plaintiff pleads
“allow[ ] the court to draw the reasonable inference that the defendant is liable for the

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misconduct alleged.” Iqbal, 556 U.S. at 678. That is, the complaint must raise “more
than a sheer possibility that a defendant has acted unlawfully.” Id. “Determining
whether a complaint states a plausible claim for relief [is] a context-specific task that
requires the reviewing court to draw on its judicial experience and common sense.” Id.
at 679.
Both parties generally agree that to state a whistleblower claim under SOX, a
plaintiff must allege that: “(1) he or she engaged in a protected activity; (2) the employer
knew that he or she engaged in the protected activity; (3) he or she suffered an
unfavorable personnel action; and (4) the protected activity was a contributing factor in
the unfavorable action.” Nielsen v. AECOM Tech. Corp., 762 F.3d 214, 219 (2d Cir.
2014); see also Memorandum of Law in Support of Defendants’ Motion to Dismiss 7
(Doc. No. 50-1) (“Defs.’ Mem. in Supp.”); Opposition to Defendants’ Renewed Motion to
Dismiss 3-4 (Doc. No. 63) (“Pl.’s Opp.”) (both citing to Nielsen).
B. Allegations
The vast majority of the Amended Complaint is not new, but rather was already
contained in the Complaint. Accordingly, the court assumes that the parties are familiar
with the underlying allegations. To the degree that facts were added to the Amended
Complaint, the court will highlight the relevant additional allegations in the sections that
follow.
C. Discussion
a. Insufficient factual matter to meet the basic pleading requirements
ING argues that the Amended Complaint should be dismissed because it “does
not meet the basic pleading requirements of the Federal Rules.” Defs.’ Mem. in Supp. at

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7-8. ING asserts that Wiggins’s “allegations are conclusory and unadorned with the
factual detail needed to plausibly make out a Sarbanes-Oxley whistleblower claim.” Id.
More specifically, ING argues that Wiggins “never alleges who engaged in the
alleged conduct about which she claims to have reported; when that conduct occurred;
or to what plan or plans the conduct related. Nor does she so much as mention when
she made the claimed reports of alleged misconduct or to whom she made these
reports. Id. “Put simply, the Amended Complaint lacks ‘any specific detail as to the
who, where, when, or how . . . . ’ ” Id. (quoting Ryone Mfg. Corp. v. HSB Stone Corp.,
No. 3:13-CV-318 (FJS/DEP), 2015 WL 1924266, at *3 (N.D.N.Y. Apr. 28, 2015).
ING’s argument is unconvincing. The general pleading standard articulated in
Rule 8(a)(2) of the Federal Rules of Civil Procedure requires only “a short and plain
statement of the claim showing that the pleader is entitled to relief.” Fed. R. Civ. P.
8(a)(2). To meet this standard, a complaint “does not need detailed factual allegations,”
Twombly, 550 U.S. at 555, but rather need only plead “enough facts to state a claim for
relief that is plausible on its face,” id. at 570. The requirement that a pleading contain
“specific detail as to the who, where, when, or how” generally applies only under the
heightened pleading standard for fraud claims, pursuant to Rule 9(b) of the Federal
Rules of Civil Procedure. See Knoll v. Schectman, 275 Fed.Appx. 50, 51 (2d Cir. 2008)
(“The predicate acts of mail and wire fraud alleged by the plaintiff do not meet Rule
9(b)’s heightened pleading standard, for we require that such allegations state the
contents of the communications, who was involved, where and when they took place,
and explain why they were fraudulent”) (internal quotation marks omitted); see also
Greenwich Taxi, Inc. v. Uber Techs., Inc., Civil No. 14cv733 (AWT), 2015 WL 4774989,

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at *8 (D. Conn. Aug. 13, 2015) (same). Accordingly, the Amended Complaint is not
deficient – at least not for failing to comply with Rule 8(a)(2) – because it does not
articulate “the who, where, when, or how.”
b. Failure to meet the heightened pleading standard of Rule 9(b)
ING also argues that the Amended Complaint should be dismissed because
Wiggins’s “Sarbanes-Oxley whistleblower claim fails to satisfy Rule 9(b)” of the Federal
Rules of Civil Procedure. Defs.’ Mem. in Supp. at 9. ING’s argument derives from the
fact that, in order to a state a SOX whistleblower claim, Wiggins must allege that she
“engaged in a protected activity,” as such activity is defined in section 1514A of title 18
of the United States Code. Section 1514A protects employees who, under certain
circumstances not relevant to this discussion, “provide information, cause information to
be provided, or otherwise assist in an investigation regarding any conduct which the
employee reasonably believes constitutes a violation of section 1341, 1343, 1344,
or 1348, any rule or regulation of the Securities and Exchange Commission, or any
provision of Federal law relating to fraud against shareholders.” 18 U.S.C. §
1514A(a)(1). ING argues that, “[b]ecause all the statutes and regulations referenced in
§ 1514A(a)(1) are ones setting forth fraud, Federal Rule 9(b) requires that the fraud
violation itself be plead with particularity.” Id. (internal citations, quotation marks, and
alterations omitted).
However, ING’s argument overlooks the fact that section 1514A(a)(1) “protects
an employee who ‘reasonably believes’ that conduct violates an enumerated statute.”
Wallace v. Tesoro Corp., 796 F.3d 468, 480 (5th Cir. 2015). As such, there is room for
a plaintiff to maintain a SOX whistleblower claim under Section 1514A, assuming he

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has satisfied the other pleading requirements, “even if the [complained of] conduct turns
out not to be fraudulent.” Id.; see also Guyden v. Aetna, Inc., 544 F.3d 376, 384 (2d Cir.
2008) (“a whistleblower need not show that the corporate defendant committed fraud to
prevail in her retaliation claim under § 1514A”). Because section 1514A protects the
employee who acted under a reasonable belief that fraud was occurring – rather than
protecting only those employees who report activity that is, in fact, fraudulent – “Federal
Rule of Civil Procedure 9(b) does not apply because [Wiggins] brings a retaliation claim
based on his reasonable belief of fraud rather than a claim necessitating proof of fraud.”
Jin Huang v. Harman Intern. Industries Inc., Civil Action No. 3:14-cv-1263-VLB, 2015
WL 4601047, at *2 n. 3 (D. Conn. July 29, 2015); see also Wallace, 796 F.3d at 480
(“Although [the defendant] maintains that dismissal can be affirmed for failing to satisfy
Rule 9(b), it is plain from the rule’s text that it does not apply to this [SOX] retaliation
suit”). Thus, ING’s argument that the Amended Complaint must be dismissed because
it does not meet the heightened pleading standard of Rule 9(b) is without merit,
because SOX whistleblower claims do not need to be plead in accordance with this
heightened standard.
c. Failure to allege that subjective belief was objectively reasonable
Despite the fact that a SOX whistleblower complaint does not need to meet the
heightened standard of Rule 9(b), it must still allege that the plaintiff, at the time she
reported the perceived illegal behavior, “reasonably believe[d]” that the conduct she was
reporting violated one of the laws enumerated in section 1514A. See 18 U.S.C. §
1514A(a)(1). In this context, a reasonable belief is one that is “objectively reasonable.”

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Nielsen, 762 F.3d at 222. ING argues that the Amended Complaint fails to allege that
Wiggins’s subjective belief was objectively reasonable. See Defs.’ Mem. in Supp. at 9.
Both the Administrative Review Board (“ARB”) of the Department of Labor and
the Second Circuit (in Nielsen) have opined as to what a SOX whistleblower plaintiff
must allege in her complaint in order for the complaint to allege that the plaintiff
reasonably believed her employer violated one of the enumerated provisions identified
in section 1514A. In Sylvester v. Parexel Int’l LLC, ARB No. 07-123, 2011 WL 2517148
(ARB May 25, 2011), the ARB stated that:
because a complainant need not prove a violation of the
substantive laws, we feel a complainant can have an objectively
reasonable belief of a violation of the laws in Section 806, i.e.,
engage in protected activity under Section 806, even if the
complainant fails to allege, prove, or approximate specific elements
of fraud, which would be required under a fraud claim against the
defrauder directly. In other words, a complainant can engage in
protected activity under Section 806 even if he or she fails to allege
or prove materiality, scienter, reliance, economic loss, or loss
causation.
Id. at *20. In Nielsen, the Second Circuit afforded part of the ARB’s decision in
Sylvester deference under Skidmore v. Swift & Co., 323 U.S. 134 (1944), which means
that the Second Circuit adopted the portion of the ARB’s decision in Sylvester that it
deemed to be “persuasive.” See Nielsen, 762 F.3d at 221. However, the Second
Circuit did not agree completely with Sylvester. Specifically, the Second Circuit stated:
We are less certain whether the ARB was correct in concluding that
a § 1514A complaint need not even ‘approximate specific elements’
of the enumerated provisions allegedly violated, or that there is no
requirement that the violation must be ‘material.’ See Sylvester,
2011 WL 2165854, at *17–18. We note that the statute does
require plausible allegations that the whistleblower reported
information based on a reasonable belief that the employer violated
one of the enumerated provisions set out in the statute. See 18
U.S.C. § 1514A(a)(1). Thus, the statutory language suggests that,
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to be reasonable, the purported whistleblower’s belief cannot exist
wholly untethered from these specific provisions.
Id. at 221 n. 6 (emphasis in the original). The court interprets the quoted passage from
Sylvester as standing for the proposition that a SOX whistleblower plaintiff can state that
she had a reasonable belief that her employer violated one of section 1514A’s
enumerated provisions, without specifically alleging that she believed that the
employer’s conduct satisfied all of the elements of the federal statute / SEC rule that
was allegedly violated. 1 On the other hand, the court interprets the quoted passage
from footnote 6 in Nielsen as standing for the proposition that, in order for a SOX
whistleblower plaintiff to allege that she reasonably believed that her employer was
violating one of the enumerated provisions, the plaintiff must allege that she believed, at
least approximately, that her employer’s actions satisfied the elements of the
enumerated provision allegedly violated. 2

1

The Court of the Appeals for the Third Circuit has adopted the ARB approach. In Wiest v.
Lynch, 710 F.3d 121 (3d Cir. 2013), the Third Circuit noted that: “the purpose of whistleblower statutes
like SOX § 806 is to protect people who stand against institutional pressures and say plainly, ‘what you
are doing here is wrong’ in the particular way identified in the statute at issue. By identifying conduct that
falls within the ample bounds of the anti-fraud laws, an employee has done just that. That employee
should not be unprotected from reprisal because she did not have access to information sufficient to form
an objectively reasonable belief that there was an intent to defraud or the information communicated to
her supervisor was material to a shareholder's investment decision”) (internal quotation marks, citations,
and alterations omitted). The Court of Appeals for the Sixth Circuit also adopted Sylvester wholesale in
Rhinehimer v. U.S. Bancorp Investments, Inc., 787 F.3d 797, 809-811 (6th Cir. 2015).
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This seems to be in keeping with the view expressed by Judge Jordan in a dissenting opinion in
Wiest, in which he wrote: “Notwithstanding the ARB's conclusion that . . . [the] heightened pleading
requirements [of Rule 9(b)] should not be applied to SOX whistleblower claims, the same concerns that
gave rise to those requirements suggest that communications that serve as the basis of a claim under §
806 should contain something more than vague allegations concerning a possible fraud. I am not
suggesting the importation of pleading standards to the review of a whistleblower’s allegedly protected
communications. I am suggesting that it is not too much to ask for some specificity, especially since SOX
whistleblower protection has the effect of shielding an employee from any disciplinary action and should
not be lightly granted.” Wiest, 710 F.3d at 143 n. 10 (internal quotation marks and citations omitted).

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ING argues that the Amended Complaint fails to “tether” Wiggins’s “asserted
belief to any violation of one of the enumerated provisions of Section 1514A,” Defs.’
Mem. in Supp. at 11, and, more generally, that it fails to allege that Wiggins believed, at
least approximately, that ING’s behavior satisfied the elements of the enumerated
provisions allegedly violated, see Defs.’ Mem. in Supp. at 9-12. ING’s argument is
unconvincing.
The “specific provisions” identified in section 1514A are: “section 1341 [mail
fraud], 1343 [wire fraud], 1344 [bank fraud], or 1348 [securities fraud], any rule or
regulation of the Securities and Exchange Commission, or any provision of Federal law
relating to fraud against shareholders.” 18 U.S.C. § 1514A(a)(1). 3 Before alleging how
ING violated one of the “specific provisions,” the Amended Complaint identifies a
number of federal statutes and SEC rules related to ING’s responsibility “to maintain
accurate books and records, and establish adequate internal controls to ensure
accurate reporting,” namely: “15 U.S.C. § 78mb(2)(B); 17 C.F.R. § 240.13a-15; 15
U.S.C. § 7262 (SOX § 404); 15 U.S.C. § 7241 (SOX § 302); 15 U.S.C. § 78j1(m)(4)(A).” Am. Compl. ¶ 8. The Amended Complaint also identifies a number of
federal statutes and SEC rules related to ING’s responsibility to “compl[y] with a code of
ethics,” namely: “15 U.S.C. § 7264; 17 C.F.R. § 228.406(b)(4) & (5) and 17 C.F.R. §

3

It is clear that the “specific provisions” include not just the four forms of fraud that are identified
by their United States Code section numbers, but also “any rule or regulation of the Securities and
Exchange Commission, or any provision of Federal law relating to fraud against shareholders.” See
Nielsen, 762 F.3d at 222 (“We conclude that Nielsen has failed to allege that it was objectively reasonable
for him to believe that the activity he reported constituted a violation of the laws and regulations listed in §
1514A: the federal mail fraud, wire fraud, bank fraud, and securities fraud statutes, in addition to “any rule
or regulation of the Securities and Exchange Commission, or any provision of Federal law relating to
fraud against shareholders’ ”).

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229.406(b)(4) & (5)); 15 U.S.C. § 80b-11; 17 C.F.R. § 275.204A-1.” Id. ¶ 10. 4 Then,
the Amended Complaint identifies a number of sets of actions taken by ING employees
and, for each set, states Wiggins’s basis for believing that such action violated the
statutes and rules the Amended Complaint identifies in paragraphs 8 and 10.
For example, the Amended Complaint alleges that Wiggins raised concerns
about inaccuracies in ING’s market value assessments (“MVAs”). Id. ¶ 15. In the next
paragraph, the Amended Complaint states that Wiggins “believed that ING’s persistent
determination of incorrect MVAs violated federal securities laws because she knew that
federal securities laws required Defendants to maintain accurate books and records,
establish adequate internal controls to ensure accurate reporting of financial
information, and to act in the best interests of clients in accordance with fiduciary duty
obligations.” Id. ¶ 16. The other allegations of misconduct follow a similar structural
approach – first identifying the alleged action, then identifying why Wiggins thought such
action violated a statute or rule covered by section 1514A. See, e.g., ¶¶ 18-19
(deferred sales charges); ¶¶ 21-22 (removal of files from SOX audits); ¶¶ 24-25
(disregard for internal controls); ¶¶ 27-31 (other violations of fiduciary duties).

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ING does not argue that these federal statutes and SEC rules fall outside the scope of “any rule
or regulation of the Securities and Exchange Commission, or any provision of Federal law relating to
fraud against shareholders.” Rather, ING argues only that section 504 of the Financial Services
Modernization Act, which is referenced in paragraph 29 of the Amended Complaint, “is not considered
among the ‘securities laws’ and thus cannot serve as a basis for a Sarbanes-Oxley whistleblower claim.”
Defs.’ Mem. in Supp. at 13. However, the Amended Complaint also states that Wiggins believed that the
behavior described in paragraphs 27-29 constituted a breach of the fiduciary duties ILIAC owed its
shareholders which, the Amended Complaint alleges, would constitute a violation of the Investment
Advisers Act of 1940. See Am. Compl. ¶¶ 9, 30. Although ING argues that a violation of the Financial
Services Modernization Act cannot serve as the basis for a SOX whistleblower claim, see Defs.’ Mem. in
Supp. at 11, it does not argue that a violation of the Investment Adviser’s Act of 1940 cannot serve as
such a basis.

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Although the Amended Complaint could be drafted with more specificity, it is not
so vague or conclusory as to render it deficient for lack of “tethering.” None of the
paragraphs, which identify why Wiggins believed the action described in the preceding
paragraph was illegal, state exactly which federal statute or SEC rule such behavior
violated. However, given that the Amended Complaint already identifies all of the
possible statutes and rules in paragraphs 8 and 10, it would be inaccurate to say that
the Amended Complaint does not connect, or “tether,” Wiggins’s belief that ING’s
actions were illegal to the specific federal statutes and SEC rules that she believed ING
was violating. For example, although paragraph 16, discussed above, does not identify
specific federal statutes or SEC rules, it states that, “federal securities laws required
Defendants to maintain accurate books and records, [and] establish adequate internal
controls to ensure accurate reporting of financial information.” Id. ¶ 16. This is the
exact same language used in paragraph 8, which does identify the relevant federal
statutes and SEC rules that impose such obligations. Id. ¶ 8. It is a reasonable
inference, then, that the “federal securities laws” referred to in paragraph 16 are those
identified in paragraph 8. As a result, the Amended Complaint sufficiently tethers the
behavior that Wiggins believed was illegal to the federal statutes or SEC rules that she
believed ING’s conduct violated.
Further, to the degree that the federal statutes / SEC rules that Wiggins alleges
ING violated contain materiality and scienter elements, the Amended Complaint
contains assertions indicating that Wiggins believed that ING’s behavior satisfied those
elements. For example, in alleging violations related to the MVAs, the Amended
Complaint states that, “some of these [MVA] inaccuracies were incorrect by large dollar

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amounts, such as hundreds of thousands of dollars.” Am. Compl. ¶ 15. These
allegations support the reasonable inference that a reasonable person in Wiggins’s
position would view such inaccuracies as material, rather than trivial. Similarly, the
Amended Complaint alleges that “plans which had accounting issues or errors were
frequently removed from the database used by auditors to identify plans to be audited
during these quarterly SOX audits. In extreme cases, the files of ‘problem’ plans which
were identified for audit went missing completely, only being located after the SOX audit
was finished.” Id. ¶ 21. Again, these allegations support the reasonable inference
that a reasonable person in Wiggins’s position could view such actions as material.
In addition to these allegations, the Amended Complaint also alleges other
behavior that supports a reasonable inference that Wiggins believed ING was acting
with the requisite scienter. For example, the Amended Complaint alleges that, “[o]n
certain occasions, ING management directed another employee to make artificial and
fraudulent accounting adjustments in Defendants’ records to conceal the gains/losses
that were caused by the incorrect MVAs.” Id. ¶ 17. Similarly, the Amended Complaint
asserts that, “[o]n certain occasions, ING management directed another employee to
make artificial and fraudulent accounting adjustments in Defendants’ records to conceal
the gains/losses that were caused by the assessment of the incorrect deferred sales
charges.” Id. ¶ 20. And, as just mentioned, the Amended Complaint asserts that ING
intentionally tried to hide certain “problem” plans from SOX auditors. Id. ¶ 21.
Accordingly, these allegations support a reasonable inference that a reasonable person
in Wiggins’s position could view such actions as having been done with the scienter
required by any of the federal statutes / SEC rules that Wiggins alleges ING violated.

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Lastly, it is worth noting that whether a belief was “objectively reasonable” is
judged according to “the basis of knowledge available to a reasonable person in the
circumstances with the employee’s training and experience.” Id. at 221 (internal
quotation marks omitted). The Amended Complaint alleges facts that permit the
reasonable inference that a person in Wiggins’s position could reasonably come to
believe that ING was acting illegally. Specifically, the Amended Complaint states that:
During her employment with Defendants, Plaintiff was registered
with the Financial Industry Regulatory Association (“FINRA”), and
held NASD 6 and 63 licenses. Plaintiff had to complete education
and training regarding federal securities laws in order to obtain
those licenses, and she completed continuing education on issues
relating to federal securities laws after obtaining those licenses.
During the term of her employment with Defendants, Plaintiff
understood that federal securities laws, including the Exchange Act
and SOX, required Defendants to maintain accurate books and
records, and establish adequate internal controls. During the term
of her employment with Defendants, Plaintiff also understood that
ILIAC was a registered investment adviser who was required to
comply with the Investment Adviser’s Act of 1940, including acting
in accordance with its fiduciary duties to clients. Plaintiff also
understood that Defendants were required to ensure compliance
with a code of ethics.
Am. Compl. ¶ 12. Given the Amended Complaint’s assertion that Wiggins was trained
to understand the federal securities laws, and that she knew that those laws required
ING to maintain accurate books and records, establish adequate internal controls, and
uphold the fiduciary duties it owed its clients, the Amended Complaint contains facts
sufficient to allow the reasonable inference that it would have been reasonable for a
person in Wiggins’s position to believe that ING was violating these obligations.
Thus, the court concludes that the Amended Complaint adequately pleads that
Wiggins possessed a subjective belief of wrongdoing, and that such subjective belief
was objectively reasonable. Accordingly, the Motion to Dismiss is denied.
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IV.

MOTIONS TO STAY
During a status conference, ING indicated that, in the event the court granted the

Motion for Reconsideration, ING would prefer to terminate the currently pending
Motions to Stay (Doc. Nos. 51 & 72) without prejudice. ING stated that its arguments
would differ depending on the number of counts in the operative complaint. Thus,
because the court is granting the Motion for Reconsideration and denying the Motion to
Dismiss, the two pending Motions to Stay are denied without prejudice.
V.

CONCLUSION
For the foregoing reasons, the Motion for Reconsideration (Doc. No. 47) is

GRANTED. The plaintiff is instructed to file a Second Amended Complaint within 21
days of this Ruling, by January 5, 2016. The Motion to Dismiss (Doc. No. 50) is
DENIED. The Motion to Stay (Doc. No. 51) is DENIED without prejudice. The Motion
to Stay (Doc. No. 72) is DENIED without prejudice.
SO ORDERED.
Dated at New Haven, Connecticut, this 15th day of December 2015.

/s/ Janet C. Hall
Janet C. Hall
United States District Judge

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