Two former executives of Northern Data, a Tether-backed German tech company known for its bitcoin mining and artificial intelligence operations, have filed a lawsuit in California. The executives, Joshua Porter and Gulsen Kama, claim they were wrongfully terminated after raising concerns about the company’s financial health and alleged tax evasion practices.
Porter, who served as the COO and later CEO of the U.S. arm of Northern Data, discovered what he described as concerning financial discrepancies within the company. According to the lawsuit, Northern Data had significant tax liabilities in Germany, low cash reserves, and a high monthly burn rate. Porter also raised alarms about potential tax liabilities in the U.S., fearing that the company could face insolvency if audited by the IRS.
Kama, who held the position of CFO for the U.S. subsidiaries, echoed Porter’s concerns about accounting and securities fraud within Northern Data. Despite their attempts to address these issues internally, both executives claim that their warnings were ignored, leading to their termination.
The lawsuit alleges that Northern Data misrepresented its financial strength to investors and engaged in tax evasion amounting to potentially tens of millions of dollars. The executives assert that their terminations were acts of illegal retaliation for their whistleblowing activities.
Legal Action and Seeking Damages
Porter and Kama’s lawsuit seeks compensatory and special damages for wrongful termination. Their legal team highlights that the alleged activities of Northern Data could expose the company to significant financial liabilities. While the exact amount of damages is unspecified, the plaintiffs suggest that the company’s actions may result in millions of dollars in liability.
A spokesperson for Tether, which has a backing relationship with Northern Data, refrained from commenting on the ongoing legal matters but reiterated the commitment to maintaining trust and transparency in operations. Northern Data has not responded to requests for comment on the allegations.
Conclusion
The lawsuit brought by former executives of Northern Data sheds light on the challenges surrounding the company’s financial practices and governance. As the legal proceedings unfold, the case underscores the importance of transparency, compliance with tax laws, and ethical conduct in the tech and cryptocurrency industries.