Alignment Healthcare is asking a federal court to throw out a whistleblower lawsuit brought by a former executive who alleged retaliation from company leadership after reporting concerns over its accounting practices.
The Medicare Advantage insurer filed its motion to dismiss Aug. 18 in the U.S. District Court for the Central District of California, targeting claims brought by former chief technology officer Hakan Kardes, PhD, under the Sarbanes-Oxley Act, which protects employees who report suspected securities fraud from workplace retaliation.
In July, Dr. Kardes alleged that he was pushed out of the company after reporting that it had misclassified $8 million to $10 million in operating expenses as capital expenditures in 2024 to inflate its adjusted EBITDA and trigger bonuses for executives. In the weeks after he shared his concerns, the complaint alleges that Alignment reversed a planned promotion and canceled or transferred increased responsibilities.
In its motion, Alignment described Dr. Kardes as a computer scientist with no background in accounting who voluntarily resigned in April 2025 after learning that internal restructuring would not be in his favor. The insurer pointed to his resignation email making no mention of fraud, retaliation or accounting concerns, along with expressed gratitude for his time at the company.
“It was only later, after the financial consequences of that voluntary departure became apparent and litigation counsel entered the picture, that Kardes recast his amicable resignation as a constructive discharge and recharacterized routine internal budget discussions as whistleblowing about securities fraud,” a spokesperson for Alignment told Becker’s.
The insurer is also arguing that Dr. Kardes missed the legal deadline to bring his claim. Under SOX, employees must first file a retaliation complaint with the Occupational Safety and Health Administration within 180 days of the alleged violation before bringing a case in federal court, a deadline that Alignment says Dr. Kardes did not meet. The company has separately moved to compel arbitration of the remaining state-law claims in the suit.
In its statement, Alignment said a third-party investigation found that Dr. Kardes’ whistleblower claims “are false” and that “there is no basis for his allegations.”
“As our Motion to Dismiss filing states, ‘this is a case of sour grapes that has been reverse engineered by Plaintiff in an attempt to frame a lawsuit,'” the company said.
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