Preview
DocuSign Envelope ID: CF6DC497-4D7A-42BB-96CA-A8A26FC330C9
1 Claire E. Cochran (SBN 222529)
Gregory W. Stevens (Admitted Pro Hac Vice)
2 LAW OFFICES OF CLAIRE COCHRAN, P.C. ELECTRONICALLY
100 Pine Street, Suite 1250g
3 San Francisco, CA 94111
F I L E D
Superior Court of California,
4 Telephone: (415) 580-6019 County of San Francisco
Facsimile: (415) 745-3301 07/30/2021
Clerk of the Court
5 BY: SANDRA SCHIRO
Attorneys for Plaintiff Deputy Clerk
6 NATHAN PETER RUNYON
7 SUPERIOR COURT OF THE STATE OF CALIFORNIA
8 FOR THE COUNTY OF SAN FRANCISCO
9 [UNLIMITED JURISDICTION]
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Case No. CGC-19-581099
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NATHAN PETER RUNYON DECLARATION OF NATHAN PETER
12 Plaintiff, RUNYON
v.
13 Accompanying Documents:
PAYWARD, INC., a California Corporation
14 d/b/a KRAKEN; and KAISER NG 1. Memorandum of Points and Authorities in
Opposition to Defendants’ Motion for
15 Summary Adjudication
Defendants. 2. Plaintiff’s Response to Defendant’s Separate
16 Statement of Undisputed Material Facts
3. Declaration of Claire Cochran
17 4. Proposed Order
18 Hearing Date: August 12, 2021
Time: 9:30 a.m.
19 Dept.: 302
Judge: Hon. Ethan P. Schulman
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Action Filed: Nov. 26, 2019
21 Trial Date: Sept. 13, 2021
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I, PETER RUNYON, hereby declare under penalty of perjury as follows:
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1. I am over the age of 18, competent to testify, have personal knowledge of the facts set
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forth in this Declaration, and, if called to testify, would testify as stated in this Declaration.
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DECLARATION OF NATHAN PETER RUNYON
DocuSign Envelope ID: CF6DC497-4D7A-42BB-96CA-A8A26FC330C9
1 Background
2 2. I was formerly employed by Payward, Inc., dba Kraken (“Payward”) as a Financial
3 Analyst. On March 14, 2018, Payward extended an offer of employment to me for the position of
4 Financial Analyst. I started work on March 26, 2018. I reported to Ng, its Chief Financial Officer.
5 Status as a United States Marine Corps Wartime Veteran
6 3. I have been diagnosed with depression and anxiety and am a Marine Corps wartime
7 veteran.
8 4. During March 2019, Payward updated its Human Resources software system to
9 Bamboo HRIS. I set up my account and added my wartime veteran status, including my military
10 service awards and disabled veteran status. Around the first week of July 2019, I was at the office
11 working late and Ng asked me if I wanted a beer. The office keeps a regular stock of beer and
12 liquor at the office. I agreed to have a beer while I was doing some work at my desk. During a
13 brief conversation, I told Ng it was great that Payward collected the diversity information in
14 Bamboo and maybe they could include it in the investor update deck that I helped to create. Ng
15 then mentioned that he saw my disabled veteran status in Bamboo in a surprised tone unaware that
16 I was a disabled veteran. I confirmed I was disabled; Ng laughed and said: “You don’t look
17 disabled.” I walked away and went to the restroom. I was offended by the mocking tone and
18 statement as to both my status as a veteran and my disability.
19 5. This was not the first time someone at the office made an offensive statement about my
20 veteran status. Once in a meeting with the Director of Recruiting and the Legal Administrator, the
21 Director or Recruiting asked me if during my time in the Marines and overseas I ever killed
22 anyone. I, once again shocked and severely offended, responded that her question was
23 inappropriate.
24 6. Over the course of my employment, Ng treated me more harshly than any other
25 Payward employee that worked under him. Ng would frequently get angry, yell, lose his temper
26 and verbally attack me. I tried to bring this to Ng’s attention by explaining that Ng yelled at and
27 became angry with me more than anyone else at work. Ng responded that he thought I could
28 handle it because of my military training and background. The yelling and verbal attacks
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DECLARATION OF NATHAN PETER RUNYON
DocuSign Envelope ID: CF6DC497-4D7A-42BB-96CA-A8A26FC330C9
1 continued to my dismay. On numerous occasions after Ng would verbally attack me, I would
2 remind him that I was the only one on the team that he could talk to in this way because I would
3 not cry or get upset given my time served as a Marine and as such, could withstand this type of
4 treatment. I explained that just because I did not cry did not mean that Ng’s treatment did not
5 bother me. Ng continued to verbally harass and attack me because of my wartime veteran status.
6 My Request for a Reasonable Accommodation
and Payward’s Hostile and Retaliatory Response
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7. Ng was openly hostile and antagonistic to my repeated requests for a reasonable
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accommodation for my disabilities / medical condition.
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8. I repeatedly requested a reasonable accommodation for my anxiety and depression in
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the form of taking paid time off from work. Ng repeatedly said that I could take leave but then,
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when the time came for me to do so, postponed my leave so that I could complete more work and,
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as I note below, imposed requirements on me that seriously inferred with my ability to sleep and,
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as a result, exacerbated my anxiety, depression and PTSD.
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9. Instead of accommodating my need for time off, Ng changed the requirements of my
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position by substantially increasing his demands on my time. In particular, Ng increasingly
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required me to work hours and be available very late into the night and very early in the morning –
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requirements that did not exist when I started work for Payward. Ng was fond of saying that he
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only slept two hours a night. As a consequence, he expected me to be available to communicate
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with him and address issues that when he was up and working which, frequently, severely
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interfered with my ability to sleep. By way of example, he would constantly send me messages
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late at night and early in the morning, for example, at 1:30 a.m., demanding an immediate
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response on the issue that Ng had raised. That constant interference with my ability to sleep, in
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turn, exacerbated my anxiety and depression. I explained to Ng that sleep was vital to the ability to
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function and actually gave him a book entitled “Why We Sleep.” In response, he said that he
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needed just two hours of sleep a night and, if I did not want to make myself available when he
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wanted me to be available, he would find someone else who would. Thus, instead of
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accommodating my disabilities and granting my request for time off, Ng made extraordinarily
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DECLARATION OF NATHAN PETER RUNYON
DocuSign Envelope ID: CF6DC497-4D7A-42BB-96CA-A8A26FC330C9
1 unreasonable demands on me. Attached to this Declaration as Addendum A is a true and correct
2 copy of a spreadsheet that accurately reflects the instances in which NG required me to
3 communicate with him via Slack outside of regular working hours (9:00 a.m. to 5:00 p.m. Monday
4 through Friday, and holidays) and the instances in which Ng required me to communicate with
5 him after 10:00 p.m. and until 3:00 a.m.
6 10. During or around July 2019, after my prior requests had been repeatedly postponed by
7 Ng, I again approached Ng and asked him if I could take medical leave from August 1 through
8 August 30, 2019, as a reasonable accommodation for my disability / medical condition.
9 11. When it finally appeared that I would be able to take that leave, I brought to Ng’s
10 attention my need, again as an accommodation to my disability / medical condition, to work par-
11 time on a different floor of the office that was quieter and had fewer distractions, so that I could
12 complete my work prior to my first day of leave. I never told Ng that I could not work around the
13 accounting team. Rather, in relocating my workspace, I wanted to make sure that I was always
14 available and accessible to the finance teams and make sure that they could get whatever they
15 needed from me while I was still in the office.
16 12. I explained to Ng that I had not taken any PTO in over a year, and I felt the symptoms
17 of my depression, insomnia, anxiety and PTSD were becoming unmanageable. I explained to Ng
18 how working long hours in the office, and on weekends, including attending the UC Berkeley
19 class in which Ng had required me to enroll had taken its toll on my mental health and exacerbated
20 my disability. Worried that Ng would become angry or even prevent me from taking the necessary
21 leave, I proposed that, during my 30-day leave, I could make myself available via email and cell
22 phone for Ng and even work a few hours each day if necessary. Ng verbally approved my PTO
23 only if I could complete the Carta project first.
24 13. On the first day of my approved leave, Ng asked me if I had time to talk. Ng called me
25 on Zoom, with no one else on the line. During the call, Ng informed me that the company had
26 decided that it was best to “sever their relationship” with me immediately. I was shocked that I
27 was being terminated and on my first day of leave. Ng did not offer a reason for my termination.
28 Nor did he even suggest that I was being terminated for poor performance or for my personal
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DECLARATION OF NATHAN PETER RUNYON
DocuSign Envelope ID: CF6DC497-4D7A-42BB-96CA-A8A26FC330C9
1 relationships with other employees. Those proffered reasons were raised for the first time after this
2 civil action was filed.
3 14. During the Zoom call, Ng said that they would send me two different separation
4 agreements to review and sign. Following the call, my access to my Slack channels were shut
5 down, my computer applications had been deactivated, and I had been logged out of my company
6 computer.
7 Ng’s False Claims About Providing Feedback
8 15. Ng claims in paragraph 53 of his Declaration that he would have follow ups with me
9 regarding tasks that I was assigned that I would not deliver or would be delayed in delivering.
10 This assertion is false. I requested the one-on-one meetings in order to obtain feedback so that I
11 could perform my job well. I always brought my laptop computer to these meetings to show Ng
12 exactly what I was working on and why the preparation of the revenue report was delayed. I was
13 not the reason for the delay in the preparation of the revenue report. The delay in the preparation
14 of the revenue report was caused by the raw revenue data not being uploaded in a timely way.
15 16. Ng claims in paragraph 54 of his Declaration that he provided me with critical
16 feedback, both written and oral, concerning performance-related issues. This assertion is false. In
17 fact, Ng did not provide critical feedback except on a rare occasion. The representations made by
18 Ng in paragraph 54 of his Declaration, cited in support of this assertion, are false. Yifu Guo, the
19 person in charge of the data who worked with Thanh Luu, the Chief Technology Officer, who
20 would upload data it to a database from which I would calculate monthly revenue. Guo was
21 consistently late in uploading the necessary data. Ng knew and knows this. I was always prompt in
22 getting the revenue report out once I had the data. I repeatedly communicated to Ng that the
23 revenue report would be late because the raw revenue data had not been uploaded into the
24 database when I would prepare the report.
25 Ng’s False Claims About How His Decision to Terminate
My Employment Came About
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17. Ng claims in paragraph 61 of his Declaration that, during a July 2019 conversation, he
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asked me to show what I had done on a particular task. This assertion is false and misleading. In
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DECLARATION OF NATHAN PETER RUNYON
DocuSign Envelope ID: CF6DC497-4D7A-42BB-96CA-A8A26FC330C9
1 fact, with no prompting, I always provided updates during the weekly one-on-one meetings with
2 Ng that I had started. In those one-on-one meetings I always brought my laptop to show him what
3 I had done.
4 18. Also contrary to the representation by Ng in paragraph 61 of his Declaration filed in
5 this case, there was never a meeting during July 2019 or at any other time with Ng in which I
6 showed him that no work had been done on a task. Similarly, also contrary to Ng’s representations
7 in his Declaration in that paragraph, he never asked me if I was going to perform the work that had
8 been assigned to me. There is no documentation of any sort of which I am aware of that reflects
9 this purported conversation and the Defendant has produced no such documentation. It did not
10 occur. Similarly, and also contrary to Ng’s representations in his Declaration, I never told him that
11 I would not do the work that I was requested to do. Again, there is no documentation of any sort of
12 which I am aware that reflects this purported conversation and the Defendant has produced no
13 such documentation. Finally, again contrary to Ng’s representations, he never told me that, if I was
14 not going to do any work, I should not be there. The conversation simply did not occur and the
15 Defendant has produced no records reflecting what would appear to be a pivotal conversation.
16 19. Likewise, again contrary to Ng’s representations in paragraph 61 of his
17 Declaration, there was no conversation between me and Ng in which I said that I could not work
18 with the accounting team. As noted here, though, we did have a conversation in which I requested,
19 as an accommodation, the ability to work from home for a period. In fact, as noted above, I stated
20 that I needed to work part-time on a different floor with a quieter space and fewer distractions in
21 order to ensure that all tasks were completed before I went on leave. The 11th floor was optimal
22 for that purpose, while, at the same time, giving the finance team access to me while I was still in
23 the office.
24 20. Ng claims paragraph 62 his Declaration that he decided to fire me after the purported
25 conversation with me that he says occurred on Saturday, July 27, 2021. This assertion is
26 demonstrably false. There was no meeting and there was no conversation on that day. Rather, on
27 Sunday, July 28, 2019, I messaged him saying that I would work from home “this week.”
28 Consequently, he could not have made the decision to terminate me after “this conversation”. In
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DECLARATION OF NATHAN PETER RUNYON
DocuSign Envelope ID: CF6DC497-4D7A-42BB-96CA-A8A26FC330C9
1 fact, there is no documentation of which I am aware, and Defendant has produced none, showing
2 that such a conversation ever occurred.
3 The Absence of Any Performance Evaluation
Or Disciplinary Action of Any Sort
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21. During the entirety of my employment with Payward, I never received disciplinary
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action of any sort or any sort of written counseling concerning the performance of my work for
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Payward or in which Payward claimed that I needed to address personal conflicts between me and
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other employees. I never received an actual performance review. I asked for feedback and created
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a performance review process but the process was never actually implemented. In fact, when I was
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terminated, Ng did not even inform me that I was being terminated for poor performance or
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interpersonal conflicts with other employees or for any reasons whatsoever. Finally, before this
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civil action was filed, I was never provided with any reason for my termination or any
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documentation from Payward reflecting a reason for my termination.
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22. On March 29, 2019, I requested a meeting with Ng to conduct a one-year evaluation,
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so that, again, I would be able to understand expectations about my work and perform my job as
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well as possible. Ng never actually evaluated my work. Instead, Ng asked me to put together an
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employee performance plan for the company and that he wanted me to be the first one to fill it out.
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Payward did not conduct performance evaluations and had no established internal framework to
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support employee performance evaluations. Ng said he would use my format for the rest of the
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finance team once he used it on me during my review. Evaluating myself, I included three
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strengths, three weaknesses, a few grading categories such as “attention to detail” and three goals
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for the next year.
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23. At the end of my having walked Ng through the performance evaluation template,
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Ng’s only response was how I needed to work more hours. I was bewildered by Ng’s statement,
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given that I worked some of the longest hours in the office. I asked Ng who worked more than he
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did, how much more did I need to work, and who was meeting Ng’s expectations? Ng became
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visibly upset and began to yell “No one is meeting my expectations. I am not even meeting my
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own expectations.” Ng explained that I should only sleep two hours per night so I could be more
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DECLARATION OF NATHAN PETER RUNYON
DocuSign Envelope ID: CF6DC497-4D7A-42BB-96CA-A8A26FC330C9
1 productive and dedicated. I did not agree with Ng’s analysis and explained that sleeping only two
2 hours a night was an unhealthy expectation. I reminded Ng I also enrolled in the UC Berkeley
3 Coding class, which I knew required an extra 20-30 hours outside of class on top of the 10 hours
4 of classroom time.
5 24. Ng had no response and the performance evaluation ended. During the performance
6 evaluation, Ng did not claim that I was not performing the duties of my job well or that I had
7 personal conflicts with other employees that posed a problem or even a minor issue for the
8 company.
9 My Dedication to and Actual Performance With the Company
10 25. During my employment with Payward, I was consistently a major asset to the
11 company and performed my work well.
12 26. During my first week at Payward, I trained under “Employee 1”. Employee 1 was
13 Payward’s United States Controller. He was supposed to help me better understand the financials
14 and the layout of the company. It soon became apparent that the Controller was not competent. By
15 way of example, Controller asked me for help understanding simple finance questions, such as
16 “what causes the price of bitcoin to go up and down” (market supply/demand), “who owns the
17 blockchain” (he thought it was a physical chain of blocks held in a vault somewhere, instead of a
18 distributed ledger), and he thought there was one-sided accounting (instead of two-sided
19 accounting for debits and credits). I helped educate Employee 1 on the supply and demand concept
20 of Bitcoin pricing and helped him understand how cryptocurrency works. Payward’s accountant,
21 “Employee 2,” and Ng were present for several of these conversations with Employee 1 and me.
22 27. Within less than a week at Payward, Ng agreed to separate my work from Employee
23 1’s supervision and informed Employee 1 that I would no longer report to him or have tasks
24 assigned by him. I even created an automated reconciliation tool for Employee 1 to use that
25 automatically matched debits with credits. Within a few months, after it was made clear that
26 Employee 1 lacked even a basic understanding of the company and how to operate the accounting
27 team, Employee 1 was terminated.
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DECLARATION OF NATHAN PETER RUNYON
DocuSign Envelope ID: CF6DC497-4D7A-42BB-96CA-A8A26FC330C9
1 28. Beginning March 30, 2018, my first assignment was to help with an audit, “Payward
2 FAS Registration AUP.” I created policy letters and documentation for the company, even though
3 I had only been working at Payward for four days and knew nothing about the details. To ensure
4 that Payward received all materials for the audit, I worked long hours and did not leave the office
5 until after 10:00 or 11:30 p.m. Ng told me to come up with anything for the audit list that would
6 satisfy the audit questions without regard to the accuracy of the information. Ng wanted something
7 to “check the box.” This was the first time I questioned Ng’s judgment, ethical, and fiduciary
8 obligations to the company.
9 29. Ng also relied extensively on me and my dedication to the company to accomplish
10 tasks outside of my job duties and beyond my agreement with Payward. Ng expected full devotion
11 from me to help accomplish these tasks, including cancelling my vacation in February 2019 to
12 help finalize option grants.
13 30. By way of example, I completed a Data Analytics bootcamp at UC Berkeley in July
14 2019 after Ng expressed concern that “Employee 3” did not have the code skills she claimed. In
15 late December 2018, Ng suggested to me that I look into code school because he believed
16 Employee 3 lied that about her skills with Python and Sequel. Again, this was beyond the
17 agreement between Payward and me. I found a six-month Data Analytics course at UC Berkeley
18 Extension that required 10 hours of weekly classroom study and 20+ hours of time outside the
19 classroom to complete the course. The class met Monday and Wednesday from 6:30 p.m. until
20 9:30 p.m. and Saturday from 10:00 a.m. until 2:00 p.m. The course began February 4, 2019, and
21 ended July 31, 2019. Ng required me to take the course.
22 31. At that point, I was already working between 55-65 hours a week at Payward. After
23 the 10 hours of weekly classes and completing the school assignments and projects, I had to spend
24 another 20 to 30 hours a week on the class. I was never paid for the hours I spent on taking the
25 class that Ng had required. Nor did Ng alter my employment agreement to reflect my new and
26 extended duties and responsibilities. I quickly implemented my new skills for my work at Payward
27 and was proficient in Tableau and Sequel. I also taught other employees how to use Carta.
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DECLARATION OF NATHAN PETER RUNYON
DocuSign Envelope ID: CF6DC497-4D7A-42BB-96CA-A8A26FC330C9
1 32. Another example occurred in February 2019, when I was scheduled to take a week-
2 long vacation for my best friend’s wedding, a vacation that had been preapproved by Ng. The day
3 before I was scheduled to leave, Ng told me that he needed me to stay to help because the option
4 grant from the Board required more work before it was finalized. The department managers kept
5 requesting changes, Ng stated that he did not have the time to address them, and he made clear to
6 me that he expected me not to take my properly-noticed vacation time to complete the task. Being
7 a loyal and dedicated employee, I canceled my trip and stayed at work to finish the option grants.
8 The Expectations of Payward and Ng to Ignore
Their Unethical and Unlawful Business Tactics
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33. During the course of my employment, I came across numerous unethical or unlawful
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business practices that Ng condoned or for which he was responsible. I questioned Ng’s business
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decisions, but for the most part, given Ng’s decidedly hostile response to my expression of my
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concerns, I stated my concerns about the issue, challenged what I considered to be inappropriate
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conduct, and moved on. As I note below, in May 2019, after multiple challenges to Ng’s
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fraudulent or otherwise unethical or improper conduct, I made what became my final challenge.
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34. Before that, the following incidents constitute examples of conduct that I reasonably
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believed was unlawful on the part of Payward and Ng, conduct that I reported and challenged,
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reports and challenges that were ignored by Payward and Ng:
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35. In August 2018, after I had been working at Payward for a few months, Ng asked me
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if he could use my home address for applications for banks and regulators. Ng said he did not want
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anyone having his actual home address, because, he claimed, he was concerned for his family’s
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safety given the kidnapping in cryptocurrency exchanges. Ng urged me to consider his request as
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necessary to protect his and his family’s safety. I felt obligated to agree but remained
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uncomfortable. Ng, observing my obvious trepidation, offered that the company would pay rent to
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me in the sum of $1,600 per month for a “room” in my apartment so that Ng could use the address
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on legal, licensing, and banking documents. I reluctantly agreed. Before signing the lease, with Ng
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as the renter and me as the landlord, I asked how I would be receiving the monthly rent, from Ng
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directly or the company. Ng said he would “figure it out” but that it did not need to be done right
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DECLARATION OF NATHAN PETER RUNYON
DocuSign Envelope ID: CF6DC497-4D7A-42BB-96CA-A8A26FC330C9
1 then. In August and October 2018, a member of the Compliance team provided a physical copy of
2 a lease for me to sign but I never received a fully executed copy with Ng’s signature. Ng led me to
3 believe that it would eventually be paid. On March 1, 2019, an attorney at Payward sent me a lease
4 to sign via DocuSign to “rent” my apartment. While on a call with the attorney, she asked me if
5 Ng ever paid me rent and I confirmed that I had also never received any money. The attorney
6 explained that Jesse Powell, CEO, did the same thing to her by using her apartment address and
7 that Payward had never compensated her with the agreed-upon rent.
8 36. During April 2018, I posted in the Slack (a messaging app for businesses) channel
9 suggestion box that Payward remove the gendered bathrooms. Ng pulled me aside and told me
10 that not everyone thought my joke was funny. It was not a joke. I defended my position and stated
11 my recommendation was not a joke and that Payward should make the bathroom non-gender
12 specific. I later learned that Ng had contemplated firing me for this suggestion because he
13 considered me to be a “liability” based on my concern over the designation of the bathrooms.
14 37. During summer of 2018, I put the suggestion into the #SF-Office-Suggestions channel
15 on Slack that the internet ports need to be changed. Christina Yee (“Yee”), who was Payward’s
16 Head of KX / Chief Brand Officer and the girlfriend of the CEO Jesse Powell, responded to me
17 that the appearance of the office was more important than the functionality and Payward would
18 not be changing the ports. After a few months of nothing being changed, along with
19 extraordinarily poor and slow internet connections in the office, I suggested to Payward’s IT
20 Specialist, “Employee 4,” via Slack that not having good connections was “a pain in the ass to
21 deal with” because it severely and negatively impacted my work and caused delays. For example,
22 meetings were delayed routinely because the internet connections would take nearly ten minutes to
23 work. Additionally, I was routinely late to call into meetings because the connections were not
24 working.
25 38. Employee 4 apparently became upset that I had used the phrase “pain in the ass” and
26 went to Yee to complain about my comment. I discovered that Employee 4 complained after Yee
27 asked me why I had used the phrase “pain in the ass” to Employee 4. I explained my comment and
28 that I was not trying to be offensive or abrasive but was merely using that expression to
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DECLARATION OF NATHAN PETER RUNYON
DocuSign Envelope ID: CF6DC497-4D7A-42BB-96CA-A8A26FC330C9
1 communicate my frustration. I had thought that Employee 4 and I were on friendly terms, given
2 that we hung out outside of work on multiple occasions, it was not going to offend Employee 4.
3 Yee responded that I was not going to last long at Payward. I asked if Yee was threatening to fire
4 me because it appeared from her statement that she was threatening my job even though she was
5 not my manager. She became upset by my response. Immediately after the conversation with Yee,
6 I spoke with Ng and retold him the interaction I had with Employee 4 and Yee. Ng responded that
7 Yee already told him and that she found my behavior rude. I defended myself and said I was not
8 being rude rather I was sincerely worried she was threatening my job. Ng asked me while in my
9 office and began to yell at me about how I could not talk to Yee in that manner and whether I
10 understood that Yee and the CEO Powell were dating. Ng told me that, because of this
11 relationship, I needed to be careful about what I said to the CEO’s girlfriend.
12 39. A couple weeks later, during my weekly 1-on-1 meeting with Ng that I had requested
13 in order to perform my job as well as possible, Ng asked me if I ever heard “rumors” that
14 Christina Yee and Powell were dating. I was confused by the question, given that it was Ng who
15 told me the CEO and Head of KX were dating. Ng explained how I should not listen to those
16 rumors because it was false. Ng’s eyes darted back and forth at his phone, which was sitting on the
17 table, as if it were on speaker for the listener to hear Ng’s directive and my response. I felt
18 incredibly uncomfortable, because Ng was clearly contradicting himself and was behaving
19 strangely. I later discovered that Powell and Yee’s relationship could not be public given their
20 roles as officers and major shareholders of Payward, because the relationship created a conflict of
21 interest and issues with the Securities and Exchange Commission (“SEC”).
22 40. On February 20, 2019, at 1:15 p.m. I sent an email to Payward’s Compliance Officer,
23 Steve Christie (“Christie”), along with a link to a country list to check on the countries from which
24 Payward earned revenue streams. I was concerned about how Payward aligned the countries for
25 revenue reporting and mostly worried that Payward could not operate in those countries. I made
26 numerous requests to Christie in person and via Slack, Highside and/or Wickr messages (Highside
27 and Wickr are apps mandated by Payward to be used by employees to discuss confidential and
28 sensitive topics) to seek clarification on revenue alignment for each region regarding the topic. I
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DECLARATION OF NATHAN PETER RUNYON
DocuSign Envelope ID: CF6DC497-4D7A-42BB-96CA-A8A26FC330C9
1 believed that Payward could not receive revenue from many of the countries with which Payward
2 did business. I explained to Christie in person (approximately five separate occasions) and on
3 Slack (three separate occasions) that some of the countries and businesses from which Payward
4 received revenue were on the United States Department of the Treasury’s Office of Foreign Assets
5 Control Specially Designated Nationals and Blocked Persons List (“OFAC List”). I also raised
6 these same concerns to Ng numerous times in person and on Slack, Highside and/or Wickr (again,
7 Highside and Wickr are apps are mandated by Payward to be used by employees to discuss
8 confidential and sensitive topics).. On a Slack channel with Ng, Christie and me, I continued to
9 ask Christie for my assistance in reviewing the OFAC List. Christie never responded and Ng never
10 pursued the subject with me or, to my knowledge, with Christie. I also raised this issue to Ng
11 numerous times in our weekly meetings. Ng reassured me that he would follow up with Christie
12 and “it would be resolved.” I realized that Christie would never address my questions and
13 concerns about this subject and Ng’s lack of concern spoke volumes. Ng never made a request to
14 me to align countries to regions for purposes of revenue recognition. I eventually figured out that I
15 should drop the issue to avoid further frustrating Ng with my concerns and challenges as to
16 whether Payward was engaging in unlawful activity in violation of Treasury’s OFAC Rules.
17 41. In March 2019, Ng asked me to help with reconciling the bank balances with the
18 customer balances in Payward’s system. This involved my looking into Payward’s system and
19 looking up the total expected customer and operating account balances for U.S. Dollars, British
20 Pounds, Canadian Dollars, Japanese Yen, Korean Won and Euros, and then comparing those
21 balances with Payward’s actual bank balances. I discovered that Payward’s bank balances were
22 short of customer deposits. After a thorough matching of deposits and withdrawals, I concluded
23 the bank accounts were short millions of dollars, but more research was needed to clarify why
24 there was still a discrepancy. I brought this to Ng’s attention during our weekly meetings and
25 implored Ng to investigate why there were missing funds and where they could be found. I was
26 concerned that someone hacked into the system or found a loophole and was able to bleed the
27 funds. I made clear that the discrepancy was a serious concern and should be given priority, given
28
13
DECLARATION OF NATHAN PETER RUNYON
DocuSign Envelope ID: CF6DC497-4D7A-42BB-96CA-A8A26FC330C9
1 that it risked customer funds. In response, Ng immediately removed me from working on the
2 project after my discovery and report to Ng concerning the discrepancy.
3 My Challenge to Ng’s Unlawful Conduct
in Altering a Stock Optioning Schedule
4 that Was Authorized and Approved by the Board and
Payward’s Hostile and Retaliatory Response
5
42. Beginning April 2019, I spent the majority of my time working on a program, Carta,
6
that provides an online platform with which to manage a company’s capitalization table (“Cap
7
Table”). Carta is an online-based equity management and valuation company. Carta users can
8
exercise their stock options, transfer shares and companies can manage their Cap Table and get
9
assistance with valuing their company (known as a 409a valuation).
10
43. On or about May 7, 2019, I noticed that the November 27, 2017, Board Minutes set
11
Employee 5’s options grant vesting schedule at a different vesting schedule than the one entered
12
into Carta and that Employee 6’s vesting information had also changed. I assumed that it was an
13
error with the upload when migrating to Carta; and, accordingly, I changed it to reflect the vesting
14
schedule set out in the Board’s Unanimous Consent. Employee 5 later contacted me to learn how
15
they could exercise their options. I then discovered that once again in Carta it was changed back to
16
the incorrect vesting schedule. I was confused and believed that someone else was deliberately
17
entering the wrong information into Carta after I had fixed it.
18
44. I raised my concerns with Ng and, in so doing, challenged his change to the vest
Preview
DocuSign Envelope ID: CF6DC497-4D7A-42BB-96CA-A8A26FC330C9 1 Claire E. Cochran (SBN 222529) Gregory W. Stevens (Admitted Pro Hac Vice) 2 LAW OFFICES OF CLAIRE COCHRAN, P.C. ELECTRONICALLY 100 Pine Street, Suite 1250g 3 San Francisco, CA 94111 F I L E D Superior Court of California, 4 Telephone: (415) 580-6019 County of San Francisco Facsimile: (415) 745-3301 07/30/2021 Clerk of the Court 5 BY: SANDRA SCHIRO Attorneys for Plaintiff Deputy Clerk 6 NATHAN PETER RUNYON 7 SUPERIOR COURT OF THE STATE OF CALIFORNIA 8 FOR THE COUNTY OF SAN FRANCISCO 9 [UNLIMITED JURISDICTION] 10 Case No. CGC-19-581099 11 NATHAN PETER RUNYON DECLARATION OF NATHAN PETER 12 Plaintiff, RUNYON v. 13 Accompanying Documents: PAYWARD, INC., a California Corporation 14 d/b/a KRAKEN; and KAISER NG 1. Memorandum of Points and Authorities in Opposition to Defendants’ Motion for 15 Summary Adjudication Defendants. 2. Plaintiff’s Response to Defendant’s Separate 16 Statement of Undisputed Material Facts 3. Declaration of Claire Cochran 17 4. Proposed Order 18 Hearing Date: August 12, 2021 Time: 9:30 a.m. 19 Dept.: 302 Judge: Hon. Ethan P. Schulman 20 Action Filed: Nov. 26, 2019 21 Trial Date: Sept. 13, 2021 22 23 I, PETER RUNYON, hereby declare under penalty of perjury as follows: 24 1. I am over the age of 18, competent to testify, have personal knowledge of the facts set 25 forth in this Declaration, and, if called to testify, would testify as stated in this Declaration. 26 27 28 DECLARATION OF NATHAN PETER RUNYON DocuSign Envelope ID: CF6DC497-4D7A-42BB-96CA-A8A26FC330C9 1 Background 2 2. I was formerly employed by Payward, Inc., dba Kraken (“Payward”) as a Financial 3 Analyst. On March 14, 2018, Payward extended an offer of employment to me for the position of 4 Financial Analyst. I started work on March 26, 2018. I reported to Ng, its Chief Financial Officer. 5 Status as a United States Marine Corps Wartime Veteran 6 3. I have been diagnosed with depression and anxiety and am a Marine Corps wartime 7 veteran. 8 4. During March 2019, Payward updated its Human Resources software system to 9 Bamboo HRIS. I set up my account and added my wartime veteran status, including my military 10 service awards and disabled veteran status. Around the first week of July 2019, I was at the office 11 working late and Ng asked me if I wanted a beer. The office keeps a regular stock of beer and 12 liquor at the office. I agreed to have a beer while I was doing some work at my desk. During a 13 brief conversation, I told Ng it was great that Payward collected the diversity information in 14 Bamboo and maybe they could include it in the investor update deck that I helped to create. Ng 15 then mentioned that he saw my disabled veteran status in Bamboo in a surprised tone unaware that 16 I was a disabled veteran. I confirmed I was disabled; Ng laughed and said: “You don’t look 17 disabled.” I walked away and went to the restroom. I was offended by the mocking tone and 18 statement as to both my status as a veteran and my disability. 19 5. This was not the first time someone at the office made an offensive statement about my 20 veteran status. Once in a meeting with the Director of Recruiting and the Legal Administrator, the 21 Director or Recruiting asked me if during my time in the Marines and overseas I ever killed 22 anyone. I, once again shocked and severely offended, responded that her question was 23 inappropriate. 24 6. Over the course of my employment, Ng treated me more harshly than any other 25 Payward employee that worked under him. Ng would frequently get angry, yell, lose his temper 26 and verbally attack me. I tried to bring this to Ng’s attention by explaining that Ng yelled at and 27 became angry with me more than anyone else at work. Ng responded that he thought I could 28 handle it because of my military training and background. The yelling and verbal attacks 2 DECLARATION OF NATHAN PETER RUNYON DocuSign Envelope ID: CF6DC497-4D7A-42BB-96CA-A8A26FC330C9 1 continued to my dismay. On numerous occasions after Ng would verbally attack me, I would 2 remind him that I was the only one on the team that he could talk to in this way because I would 3 not cry or get upset given my time served as a Marine and as such, could withstand this type of 4 treatment. I explained that just because I did not cry did not mean that Ng’s treatment did not 5 bother me. Ng continued to verbally harass and attack me because of my wartime veteran status. 6 My Request for a Reasonable Accommodation and Payward’s Hostile and Retaliatory Response 7 7. Ng was openly hostile and antagonistic to my repeated requests for a reasonable 8 accommodation for my disabilities / medical condition. 9 8. I repeatedly requested a reasonable accommodation for my anxiety and depression in 10 the form of taking paid time off from work. Ng repeatedly said that I could take leave but then, 11 when the time came for me to do so, postponed my leave so that I could complete more work and, 12 as I note below, imposed requirements on me that seriously inferred with my ability to sleep and, 13 as a result, exacerbated my anxiety, depression and PTSD. 14 9. Instead of accommodating my need for time off, Ng changed the requirements of my 15 position by substantially increasing his demands on my time. In particular, Ng increasingly 16 required me to work hours and be available very late into the night and very early in the morning – 17 requirements that did not exist when I started work for Payward. Ng was fond of saying that he 18 only slept two hours a night. As a consequence, he expected me to be available to communicate 19 with him and address issues that when he was up and working which, frequently, severely 20 interfered with my ability to sleep. By way of example, he would constantly send me messages 21 late at night and early in the morning, for example, at 1:30 a.m., demanding an immediate 22 response on the issue that Ng had raised. That constant interference with my ability to sleep, in 23 turn, exacerbated my anxiety and depression. I explained to Ng that sleep was vital to the ability to 24 function and actually gave him a book entitled “Why We Sleep.” In response, he said that he 25 needed just two hours of sleep a night and, if I did not want to make myself available when he 26 wanted me to be available, he would find someone else who would. Thus, instead of 27 accommodating my disabilities and granting my request for time off, Ng made extraordinarily 28 3 DECLARATION OF NATHAN PETER RUNYON DocuSign Envelope ID: CF6DC497-4D7A-42BB-96CA-A8A26FC330C9 1 unreasonable demands on me. Attached to this Declaration as Addendum A is a true and correct 2 copy of a spreadsheet that accurately reflects the instances in which NG required me to 3 communicate with him via Slack outside of regular working hours (9:00 a.m. to 5:00 p.m. Monday 4 through Friday, and holidays) and the instances in which Ng required me to communicate with 5 him after 10:00 p.m. and until 3:00 a.m. 6 10. During or around July 2019, after my prior requests had been repeatedly postponed by 7 Ng, I again approached Ng and asked him if I could take medical leave from August 1 through 8 August 30, 2019, as a reasonable accommodation for my disability / medical condition. 9 11. When it finally appeared that I would be able to take that leave, I brought to Ng’s 10 attention my need, again as an accommodation to my disability / medical condition, to work par- 11 time on a different floor of the office that was quieter and had fewer distractions, so that I could 12 complete my work prior to my first day of leave. I never told Ng that I could not work around the 13 accounting team. Rather, in relocating my workspace, I wanted to make sure that I was always 14 available and accessible to the finance teams and make sure that they could get whatever they 15 needed from me while I was still in the office. 16 12. I explained to Ng that I had not taken any PTO in over a year, and I felt the symptoms 17 of my depression, insomnia, anxiety and PTSD were becoming unmanageable. I explained to Ng 18 how working long hours in the office, and on weekends, including attending the UC Berkeley 19 class in which Ng had required me to enroll had taken its toll on my mental health and exacerbated 20 my disability. Worried that Ng would become angry or even prevent me from taking the necessary 21 leave, I proposed that, during my 30-day leave, I could make myself available via email and cell 22 phone for Ng and even work a few hours each day if necessary. Ng verbally approved my PTO 23 only if I could complete the Carta project first. 24 13. On the first day of my approved leave, Ng asked me if I had time to talk. Ng called me 25 on Zoom, with no one else on the line. During the call, Ng informed me that the company had 26 decided that it was best to “sever their relationship” with me immediately. I was shocked that I 27 was being terminated and on my first day of leave. Ng did not offer a reason for my termination. 28 Nor did he even suggest that I was being terminated for poor performance or for my personal 4 DECLARATION OF NATHAN PETER RUNYON DocuSign Envelope ID: CF6DC497-4D7A-42BB-96CA-A8A26FC330C9 1 relationships with other employees. Those proffered reasons were raised for the first time after this 2 civil action was filed. 3 14. During the Zoom call, Ng said that they would send me two different separation 4 agreements to review and sign. Following the call, my access to my Slack channels were shut 5 down, my computer applications had been deactivated, and I had been logged out of my company 6 computer. 7 Ng’s False Claims About Providing Feedback 8 15. Ng claims in paragraph 53 of his Declaration that he would have follow ups with me 9 regarding tasks that I was assigned that I would not deliver or would be delayed in delivering. 10 This assertion is false. I requested the one-on-one meetings in order to obtain feedback so that I 11 could perform my job well. I always brought my laptop computer to these meetings to show Ng 12 exactly what I was working on and why the preparation of the revenue report was delayed. I was 13 not the reason for the delay in the preparation of the revenue report. The delay in the preparation 14 of the revenue report was caused by the raw revenue data not being uploaded in a timely way. 15 16. Ng claims in paragraph 54 of his Declaration that he provided me with critical 16 feedback, both written and oral, concerning performance-related issues. This assertion is false. In 17 fact, Ng did not provide critical feedback except on a rare occasion. The representations made by 18 Ng in paragraph 54 of his Declaration, cited in support of this assertion, are false. Yifu Guo, the 19 person in charge of the data who worked with Thanh Luu, the Chief Technology Officer, who 20 would upload data it to a database from which I would calculate monthly revenue. Guo was 21 consistently late in uploading the necessary data. Ng knew and knows this. I was always prompt in 22 getting the revenue report out once I had the data. I repeatedly communicated to Ng that the 23 revenue report would be late because the raw revenue data had not been uploaded into the 24 database when I would prepare the report. 25 Ng’s False Claims About How His Decision to Terminate My Employment Came About 26 17. Ng claims in paragraph 61 of his Declaration that, during a July 2019 conversation, he 27 asked me to show what I had done on a particular task. This assertion is false and misleading. In 28 5 DECLARATION OF NATHAN PETER RUNYON DocuSign Envelope ID: CF6DC497-4D7A-42BB-96CA-A8A26FC330C9 1 fact, with no prompting, I always provided updates during the weekly one-on-one meetings with 2 Ng that I had started. In those one-on-one meetings I always brought my laptop to show him what 3 I had done. 4 18. Also contrary to the representation by Ng in paragraph 61 of his Declaration filed in 5 this case, there was never a meeting during July 2019 or at any other time with Ng in which I 6 showed him that no work had been done on a task. Similarly, also contrary to Ng’s representations 7 in his Declaration in that paragraph, he never asked me if I was going to perform the work that had 8 been assigned to me. There is no documentation of any sort of which I am aware of that reflects 9 this purported conversation and the Defendant has produced no such documentation. It did not 10 occur. Similarly, and also contrary to Ng’s representations in his Declaration, I never told him that 11 I would not do the work that I was requested to do. Again, there is no documentation of any sort of 12 which I am aware that reflects this purported conversation and the Defendant has produced no 13 such documentation. Finally, again contrary to Ng’s representations, he never told me that, if I was 14 not going to do any work, I should not be there. The conversation simply did not occur and the 15 Defendant has produced no records reflecting what would appear to be a pivotal conversation. 16 19. Likewise, again contrary to Ng’s representations in paragraph 61 of his 17 Declaration, there was no conversation between me and Ng in which I said that I could not work 18 with the accounting team. As noted here, though, we did have a conversation in which I requested, 19 as an accommodation, the ability to work from home for a period. In fact, as noted above, I stated 20 that I needed to work part-time on a different floor with a quieter space and fewer distractions in 21 order to ensure that all tasks were completed before I went on leave. The 11th floor was optimal 22 for that purpose, while, at the same time, giving the finance team access to me while I was still in 23 the office. 24 20. Ng claims paragraph 62 his Declaration that he decided to fire me after the purported 25 conversation with me that he says occurred on Saturday, July 27, 2021. This assertion is 26 demonstrably false. There was no meeting and there was no conversation on that day. Rather, on 27 Sunday, July 28, 2019, I messaged him saying that I would work from home “this week.” 28 Consequently, he could not have made the decision to terminate me after “this conversation”. In 6 DECLARATION OF NATHAN PETER RUNYON DocuSign Envelope ID: CF6DC497-4D7A-42BB-96CA-A8A26FC330C9 1 fact, there is no documentation of which I am aware, and Defendant has produced none, showing 2 that such a conversation ever occurred. 3 The Absence of Any Performance Evaluation Or Disciplinary Action of Any Sort 4 21. During the entirety of my employment with Payward, I never received disciplinary 5 action of any sort or any sort of written counseling concerning the performance of my work for 6 Payward or in which Payward claimed that I needed to address personal conflicts between me and 7 other employees. I never received an actual performance review. I asked for feedback and created 8 a performance review process but the process was never actually implemented. In fact, when I was 9 terminated, Ng did not even inform me that I was being terminated for poor performance or 10 interpersonal conflicts with other employees or for any reasons whatsoever. Finally, before this 11 civil action was filed, I was never provided with any reason for my termination or any 12 documentation from Payward reflecting a reason for my termination. 13 22. On March 29, 2019, I requested a meeting with Ng to conduct a one-year evaluation, 14 so that, again, I would be able to understand expectations about my work and perform my job as 15 well as possible. Ng never actually evaluated my work. Instead, Ng asked me to put together an 16 employee performance plan for the company and that he wanted me to be the first one to fill it out. 17 Payward did not conduct performance evaluations and had no established internal framework to 18 support employee performance evaluations. Ng said he would use my format for the rest of the 19 finance team once he used it on me during my review. Evaluating myself, I included three 20 strengths, three weaknesses, a few grading categories such as “attention to detail” and three goals 21 for the next year. 22 23. At the end of my having walked Ng through the performance evaluation template, 23 Ng’s only response was how I needed to work more hours. I was bewildered by Ng’s statement, 24 given that I worked some of the longest hours in the office. I asked Ng who worked more than he 25 did, how much more did I need to work, and who was meeting Ng’s expectations? Ng became 26 visibly upset and began to yell “No one is meeting my expectations. I am not even meeting my 27 own expectations.” Ng explained that I should only sleep two hours per night so I could be more 28 7 DECLARATION OF NATHAN PETER RUNYON DocuSign Envelope ID: CF6DC497-4D7A-42BB-96CA-A8A26FC330C9 1 productive and dedicated. I did not agree with Ng’s analysis and explained that sleeping only two 2 hours a night was an unhealthy expectation. I reminded Ng I also enrolled in the UC Berkeley 3 Coding class, which I knew required an extra 20-30 hours outside of class on top of the 10 hours 4 of classroom time. 5 24. Ng had no response and the performance evaluation ended. During the performance 6 evaluation, Ng did not claim that I was not performing the duties of my job well or that I had 7 personal conflicts with other employees that posed a problem or even a minor issue for the 8 company. 9 My Dedication to and Actual Performance With the Company 10 25. During my employment with Payward, I was consistently a major asset to the 11 company and performed my work well. 12 26. During my first week at Payward, I trained under “Employee 1”. Employee 1 was 13 Payward’s United States Controller. He was supposed to help me better understand the financials 14 and the layout of the company. It soon became apparent that the Controller was not competent. By 15 way of example, Controller asked me for help understanding simple finance questions, such as 16 “what causes the price of bitcoin to go up and down” (market supply/demand), “who owns the 17 blockchain” (he thought it was a physical chain of blocks held in a vault somewhere, instead of a 18 distributed ledger), and he thought there was one-sided accounting (instead of two-sided 19 accounting for debits and credits). I helped educate Employee 1 on the supply and demand concept 20 of Bitcoin pricing and helped him understand how cryptocurrency works. Payward’s accountant, 21 “Employee 2,” and Ng were present for several of these conversations with Employee 1 and me. 22 27. Within less than a week at Payward, Ng agreed to separate my work from Employee 23 1’s supervision and informed Employee 1 that I would no longer report to him or have tasks 24 assigned by him. I even created an automated reconciliation tool for Employee 1 to use that 25 automatically matched debits with credits. Within a few months, after it was made clear that 26 Employee 1 lacked even a basic understanding of the company and how to operate the accounting 27 team, Employee 1 was terminated. 28 8 DECLARATION OF NATHAN PETER RUNYON DocuSign Envelope ID: CF6DC497-4D7A-42BB-96CA-A8A26FC330C9 1 28. Beginning March 30, 2018, my first assignment was to help with an audit, “Payward 2 FAS Registration AUP.” I created policy letters and documentation for the company, even though 3 I had only been working at Payward for four days and knew nothing about the details. To ensure 4 that Payward received all materials for the audit, I worked long hours and did not leave the office 5 until after 10:00 or 11:30 p.m. Ng told me to come up with anything for the audit list that would 6 satisfy the audit questions without regard to the accuracy of the information. Ng wanted something 7 to “check the box.” This was the first time I questioned Ng’s judgment, ethical, and fiduciary 8 obligations to the company. 9 29. Ng also relied extensively on me and my dedication to the company to accomplish 10 tasks outside of my job duties and beyond my agreement with Payward. Ng expected full devotion 11 from me to help accomplish these tasks, including cancelling my vacation in February 2019 to 12 help finalize option grants. 13 30. By way of example, I completed a Data Analytics bootcamp at UC Berkeley in July 14 2019 after Ng expressed concern that “Employee 3” did not have the code skills she claimed. In 15 late December 2018, Ng suggested to me that I look into code school because he believed 16 Employee 3 lied that about her skills with Python and Sequel. Again, this was beyond the 17 agreement between Payward and me. I found a six-month Data Analytics course at UC Berkeley 18 Extension that required 10 hours of weekly classroom study and 20+ hours of time outside the 19 classroom to complete the course. The class met Monday and Wednesday from 6:30 p.m. until 20 9:30 p.m. and Saturday from 10:00 a.m. until 2:00 p.m. The course began February 4, 2019, and 21 ended July 31, 2019. Ng required me to take the course. 22 31. At that point, I was already working between 55-65 hours a week at Payward. After 23 the 10 hours of weekly classes and completing the school assignments and projects, I had to spend 24 another 20 to 30 hours a week on the class. I was never paid for the hours I spent on taking the 25 class that Ng had required. Nor did Ng alter my employment agreement to reflect my new and 26 extended duties and responsibilities. I quickly implemented my new skills for my work at Payward 27 and was proficient in Tableau and Sequel. I also taught other employees how to use Carta. 28 9 DECLARATION OF NATHAN PETER RUNYON DocuSign Envelope ID: CF6DC497-4D7A-42BB-96CA-A8A26FC330C9 1 32. Another example occurred in February 2019, when I was scheduled to take a week- 2 long vacation for my best friend’s wedding, a vacation that had been preapproved by Ng. The day 3 before I was scheduled to leave, Ng told me that he needed me to stay to help because the option 4 grant from the Board required more work before it was finalized. The department managers kept 5 requesting changes, Ng stated that he did not have the time to address them, and he made clear to 6 me that he expected me not to take my properly-noticed vacation time to complete the task. Being 7 a loyal and dedicated employee, I canceled my trip and stayed at work to finish the option grants. 8 The Expectations of Payward and Ng to Ignore Their Unethical and Unlawful Business Tactics 9 33. During the course of my employment, I came across numerous unethical or unlawful 10 business practices that Ng condoned or for which he was responsible. I questioned Ng’s business 11 decisions, but for the most part, given Ng’s decidedly hostile response to my expression of my 12 concerns, I stated my concerns about the issue, challenged what I considered to be inappropriate 13 conduct, and moved on. As I note below, in May 2019, after multiple challenges to Ng’s 14 fraudulent or otherwise unethical or improper conduct, I made what became my final challenge. 15 34. Before that, the following incidents constitute examples of conduct that I reasonably 16 believed was unlawful on the part of Payward and Ng, conduct that I reported and challenged, 17 reports and challenges that were ignored by Payward and Ng: 18 35. In August 2018, after I had been working at Payward for a few months, Ng asked me 19 if he could use my home address for applications for banks and regulators. Ng said he did not want 20 anyone having his actual home address, because, he claimed, he was concerned for his family’s 21 safety given the kidnapping in cryptocurrency exchanges. Ng urged me to consider his request as 22 necessary to protect his and his family’s safety. I felt obligated to agree but remained 23 uncomfortable. Ng, observing my obvious trepidation, offered that the company would pay rent to 24 me in the sum of $1,600 per month for a “room” in my apartment so that Ng could use the address 25 on legal, licensing, and banking documents. I reluctantly agreed. Before signing the lease, with Ng 26 as the renter and me as the landlord, I asked how I would be receiving the monthly rent, from Ng 27 directly or the company. Ng said he would “figure it out” but that it did not need to be done right 28 10 DECLARATION OF NATHAN PETER RUNYON DocuSign Envelope ID: CF6DC497-4D7A-42BB-96CA-A8A26FC330C9 1 then. In August and October 2018, a member of the Compliance team provided a physical copy of 2 a lease for me to sign but I never received a fully executed copy with Ng’s signature. Ng led me to 3 believe that it would eventually be paid. On March 1, 2019, an attorney at Payward sent me a lease 4 to sign via DocuSign to “rent” my apartment. While on a call with the attorney, she asked me if 5 Ng ever paid me rent and I confirmed that I had also never received any money. The attorney 6 explained that Jesse Powell, CEO, did the same thing to her by using her apartment address and 7 that Payward had never compensated her with the agreed-upon rent. 8 36. During April 2018, I posted in the Slack (a messaging app for businesses) channel 9 suggestion box that Payward remove the gendered bathrooms. Ng pulled me aside and told me 10 that not everyone thought my joke was funny. It was not a joke. I defended my position and stated 11 my recommendation was not a joke and that Payward should make the bathroom non-gender 12 specific. I later learned that Ng had contemplated firing me for this suggestion because he 13 considered me to be a “liability” based on my concern over the designation of the bathrooms. 14 37. During summer of 2018, I put the suggestion into the #SF-Office-Suggestions channel 15 on Slack that the internet ports need to be changed. Christina Yee (“Yee”), who was Payward’s 16 Head of KX / Chief Brand Officer and the girlfriend of the CEO Jesse Powell, responded to me 17 that the appearance of the office was more important than the functionality and Payward would 18 not be changing the ports. After a few months of nothing being changed, along with 19 extraordinarily poor and slow internet connections in the office, I suggested to Payward’s IT 20 Specialist, “Employee 4,” via Slack that not having good connections was “a pain in the ass to 21 deal with” because it severely and negatively impacted my work and caused delays. For example, 22 meetings were delayed routinely because the internet connections would take nearly ten minutes to 23 work. Additionally, I was routinely late to call into meetings because the connections were not 24 working. 25 38. Employee 4 apparently became upset that I had used the phrase “pain in the ass” and 26 went to Yee to complain about my comment. I discovered that Employee 4 complained after Yee 27 asked me why I had used the phrase “pain in the ass” to Employee 4. I explained my comment and 28 that I was not trying to be offensive or abrasive but was merely using that expression to 11 DECLARATION OF NATHAN PETER RUNYON DocuSign Envelope ID: CF6DC497-4D7A-42BB-96CA-A8A26FC330C9 1 communicate my frustration. I had thought that Employee 4 and I were on friendly terms, given 2 that we hung out outside of work on multiple occasions, it was not going to offend Employee 4. 3 Yee responded that I was not going to last long at Payward. I asked if Yee was threatening to fire 4 me because it appeared from her statement that she was threatening my job even though she was 5 not my manager. She became upset by my response. Immediately after the conversation with Yee, 6 I spoke with Ng and retold him the interaction I had with Employee 4 and Yee. Ng responded that 7 Yee already told him and that she found my behavior rude. I defended myself and said I was not 8 being rude rather I was sincerely worried she was threatening my job. Ng asked me while in my 9 office and began to yell at me about how I could not talk to Yee in that manner and whether I 10 understood that Yee and the CEO Powell were dating. Ng told me that, because of this 11 relationship, I needed to be careful about what I said to the CEO’s girlfriend. 12 39. A couple weeks later, during my weekly 1-on-1 meeting with Ng that I had requested 13 in order to perform my job as well as possible, Ng asked me if I ever heard “rumors” that 14 Christina Yee and Powell were dating. I was confused by the question, given that it was Ng who 15 told me the CEO and Head of KX were dating. Ng explained how I should not listen to those 16 rumors because it was false. Ng’s eyes darted back and forth at his phone, which was sitting on the 17 table, as if it were on speaker for the listener to hear Ng’s directive and my response. I felt 18 incredibly uncomfortable, because Ng was clearly contradicting himself and was behaving 19 strangely. I later discovered that Powell and Yee’s relationship could not be public given their 20 roles as officers and major shareholders of Payward, because the relationship created a conflict of 21 interest and issues with the Securities and Exchange Commission (“SEC”). 22 40. On February 20, 2019, at 1:15 p.m. I sent an email to Payward’s Compliance Officer, 23 Steve Christie (“Christie”), along with a link to a country list to check on the countries from which 24 Payward earned revenue streams. I was concerned about how Payward aligned the countries for 25 revenue reporting and mostly worried that Payward could not operate in those countries. I made 26 numerous requests to Christie in person and via Slack, Highside and/or Wickr messages (Highside 27 and Wickr are apps mandated by Payward to be used by employees to discuss confidential and 28 sensitive topics) to seek clarification on revenue alignment for each region regarding the topic. I 12 DECLARATION OF NATHAN PETER RUNYON DocuSign Envelope ID: CF6DC497-4D7A-42BB-96CA-A8A26FC330C9 1 believed that Payward could not receive revenue from many of the countries with which Payward 2 did business. I explained to Christie in person (approximately five separate occasions) and on 3 Slack (three separate occasions) that some of the countries and businesses from which Payward 4 received revenue were on the United States Department of the Treasury’s Office of Foreign Assets 5 Control Specially Designated Nationals and Blocked Persons List (“OFAC List”). I also raised 6 these same concerns to Ng numerous times in person and on Slack, Highside and/or Wickr (again, 7 Highside and Wickr are apps are mandated by Payward to be used by employees to discuss 8 confidential and sensitive topics).. On a Slack channel with Ng, Christie and me, I continued to 9 ask Christie for my assistance in reviewing the OFAC List. Christie never responded and Ng never 10 pursued the subject with me or, to my knowledge, with Christie. I also raised this issue to Ng 11 numerous times in our weekly meetings. Ng reassured me that he would follow up with Christie 12 and “it would be resolved.” I realized that Christie would never address my questions and 13 concerns about this subject and Ng’s lack of concern spoke volumes. Ng never made a request to 14 me to align countries to regions for purposes of revenue recognition. I eventually figured out that I 15 should drop the issue to avoid further frustrating Ng with my concerns and challenges as to 16 whether Payward was engaging in unlawful activity in violation of Treasury’s OFAC Rules. 17 41. In March 2019, Ng asked me to help with reconciling the bank balances with the 18 customer balances in Payward’s system. This involved my looking into Payward’s system and 19 looking up the total expected customer and operating account balances for U.S. Dollars, British 20 Pounds, Canadian Dollars, Japanese Yen, Korean Won and Euros, and then comparing those 21 balances with Payward’s actual bank balances. I discovered that Payward’s bank balances were 22 short of customer deposits. After a thorough matching of deposits and withdrawals, I concluded 23 the bank accounts were short millions of dollars, but more research was needed to clarify why 24 there was still a discrepancy. I brought this to Ng’s attention during our weekly meetings and 25 implored Ng to investigate why there were missing funds and where they could be found. I was 26 concerned that someone hacked into the system or found a loophole and was able to bleed the 27 funds. I made clear that the discrepancy was a serious concern and should be given priority, given 28 13 DECLARATION OF NATHAN PETER RUNYON DocuSign Envelope ID: CF6DC497-4D7A-42BB-96CA-A8A26FC330C9 1 that it risked customer funds. In response, Ng immediately removed me from working on the 2 project after my discovery and report to Ng concerning the discrepancy. 3 My Challenge to Ng’s Unlawful Conduct in Altering a Stock Optioning Schedule 4 that Was Authorized and Approved by the Board and Payward’s Hostile and Retaliatory Response 5 42. Beginning April 2019, I spent the majority of my time working on a program, Carta, 6 that provides an online platform with which to manage a company’s capitalization table (“Cap 7 Table”). Carta is an online-based equity management and valuation company. Carta users can 8 exercise their stock options, transfer shares and companies can manage their Cap Table and get 9 assistance with valuing their company (known as a 409a valuation). 10 43. On or about May 7, 2019, I noticed that the November 27, 2017, Board Minutes set 11 Employee 5’s options grant vesting schedule at a different vesting schedule than the one entered 12 into Carta and that Employee 6’s vesting information had also changed. I assumed that it was an 13 error with the upload when migrating to Carta; and, accordingly, I changed it to reflect the vesting 14 schedule set out in the Board’s Unanimous Consent. Employee 5 later contacted me to learn how 15 they could exercise their options. I then discovered that once again in Carta it was changed back to 16 the incorrect vesting schedule. I was confused and believed that someone else was deliberately 17 entering the wrong information into Carta after I had fixed it. 18 44. I raised my concerns with Ng and, in so doing, challenged his change to the vest