- Northern Data has contested a whistleblower lawsuit filed by two ex-executives, who claim to have been fired after raising concerns about the company’s finances
- The company’s legal team has filed a motion to dismiss the case, describing it as “bad faith litigation” and asserting the plaintiffs had unproductive tenures
- Northern Data has claimed that Kama was fired for cause and Porter was laid off due to lack of productivity, countering their allegations.
European bitcoin mining firm Northern Data is contesting a whistleblower lawsuit filed by two former executives, who allege wrongful termination after voicing concerns about the company’s financial stability and tax practices. On Monday evening, Northern Data’s legal team filed a motion to dismiss the federal case, describing it as a “textbook example of bad faith litigation.” The company claims the plaintiffs, Gulsen Kama and Joshua Porter, had brief, unproductive tenures, with Kama being fired for cause and Porter laid off due to “lack of productivity.”
Porter and Kama Claim They Uncovered Illegal Practices
Porter and Kama claim that they were wrongfully terminated for raising concerns about what they saw as fraudulent activities by the company’s chief executive and chief operating officer, alleging that they uncovered serious financial misrepresentations and potential tax evasion. Northern Data has denied these allegations and pledged to defend its reputation.
Porter, who was promoted to president and CEO for North America, says he discovered substantial liabilities and a precarious cash flow situation, including a $30 million German tax liability and $8 million in additional liabilities, with only $17 million in cash and a high monthly burn rate.
Kama, who served as North America’s CFO and later deputy CFO, claims she was dismissed after exposing financial misrepresentations and potential securities fraud. Both allege that Northern Data has been falsely presenting its financial health to investors, regulators, and business partners while knowingly engaging in significant tax evasion.
Northern Data Questions Claimants’ Credibility
According to Northern Data’s motion, Kama and Porter demanded severance payments, which the company refused, leading the former employees to present themselves as whistleblowers. The company asserts that the pair’s allegations are false and aimed at personal and financial gain. Northern Data’s lawyers argue that the claims are not credible and that the plaintiffs are attempting to manipulate the legal system.
The filing also notes Kama’s history of litigation against previous employers. In 2019, she sued tax preparer Jackson Hewitt, alleging wrongful termination after raising concerns about the company’s attempts to secure a $2.7 million tax break from New Jersey. Last year, she filed a suit against Quest Diagnostics, alleging workplace discrimination based on sex and ethnicity. The outcomes of these cases are not specified in the filing.
A spokesperson for Northern Data clarified the denial in a statement:
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.
A hearing to address the motion to dismiss is scheduled for August 19, 2024, in a Los Angeles court. The outcome of this hearing will determine whether the case proceeds or is dismissed due to the jurisdictional and substantive arguments presented by Northern Data’s legal team.
