Employers are legally required to stop any illegal harassment they come across in their woprkplaces. However, even though your wife's employer may have fired her boss for reasons other than illegal harassment, the fact that the harassment has now stopped means that your wife's employer is no longer in contravention of the law. And since it's no longer breaking the law, it cannot be sued. Your friend is correct.
(And anyway, what would your wife sue for, even if she could? For something that isn't happening?)

