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Н News

Bitcoin Miner Northern Data Moves to Dismiss Ex-Employees’ Whistleblower Suit

European bitcoin mining firm Northern Data is pushing back against a whistleblower suit filed by two former executives of the company who say they were wrongfully terminated after raising concerns about the company’s financial health and alleging tax evasion.On Monday evening, lawyers for Northern Data filed a motion to dismiss the federal case, calling it a “textbook example of bad faith litigation” and alleging that the two plaintiffs – Gulsen Kama and Joshua Porter – had “unproductive, brief tenures at the company” after which Kama was fired for cause and Porter was laid off for his “lack of productivity”“When Porter and Kama made extortionate demands for ‘severance’ payments, Northern Data rejected them,” Northern Data’s lawyers wrote in the motion to dismiss. “In response, both employees now style themselves as ‘whistleblowers’ and seek to profit personally and financially from allegations that they know – and have every reason to know – are false.”The Monday filing also pointed out that Kama’s suit against Northern Data is not her first rodeo filing lawsuits against her former employers. In 2019, she filed a whistleblower suit against tax preparer Jackson Hewitt, alleging that she was wrongfully terminated after raising concerns that the company lied about potentially relocating in order to get a $2.7 million tax break from the state of New Jersey. Last year, Kama filed suit against another employer, Quest Diagnostics, alleging workplace discrimination on the basis of her sex and ethnicity. The results of those whistleblower cases were not immediately clear.A lawyer for Kama and Porter did not respond to CoinDesk’s request for comment.Northern Data’s motion to dismiss is fairly procedural in nature, arguing that the California court overseeing the case should toss it out due to a lack of jurisdiction over the corporate defendants (in this case, the U.S. subsidiaries of the German tech company), who are incorporated in Delaware and have principal places of business in Virginia. The lawyers also argue that the fraud claims – which they describe as “inflammatory but completely unsupported” – lack sufficient particularity.A hearing to discuss the motion to dismiss will be held in a Los Angeles court on Aug. 19, 2024 at 1:30 pm local time (20:30 UTC).Explosive allegationsKama and Porter’s first amended complaint against their former employer contained explosive allegations that Northern Data lied to investors about the strength of its finances, hiding the fact that it is “borderline insolvent,” and, additionally, is “knowingly committing tax evasion to the tune of potentially tens of millions of dollars.”The allegations came amidst growing media buzz that the Tether-backed tech firm is considering a U.S. initial public offering (IPO) of its artificial intelligence unit, which Bloomberg reported was valued at up to $16 billion.In their Monday motion, lawyers for Northern Data declined to comment on market speculation but stressed that, if it were true, “the period leading up to an IPO is a particularly sensitive time for a company. As Plaintiffs undoubtedly know, public accusations of fraud – no matter how irresponsible – can disrupt that process.”Porter and Kama have alleged that the firm had a “$30 [million] German tax liability and additional liabilities of almost $8 [million] while simultaneously having only $17 [million] cash on the balance and a monthly burn rate of $3 [million]-$4 [million].” Their suit also alleges that the firm committed “rampant tax evasion” in its early years and had no plan to take remedial measures to account for it, potentially leaving them liable for “tens of millions of dollars” in U.S. tax liabilities if it were to be audited.Both Kama and Porter claimed they were fired after bringing their concerns to supervisors.A spokesperson for Northern Data said the firm “refutes the allegations in the strongest terms.”“It is no coincidence that these allegations from disgruntled former employees were publicized just days after unconfirmed media speculation that the company is evaluating a potential capital markets event and just ahead of the publication of our 2023 accounts. The allegations are clearly financially motivated and completely baseless. We will contest them vigorously to protect ourselves against false assertions which damage our company and our business.”The spokesperson added that the firm is “well capitalized” and has a “very robust growth plan, with revenue expected to more than triple in 2024.”

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Н News

Bitcoin Miner Northern Data Moves to Dismiss Ex-Employees’ Whistleblower Suit

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