Investors Sue Kyndryl Over ‘Misleading’ Financial Statements

A class action lawsuit was filed against Kyndryl Holdings KD -2.78% ▼ on February 11, 2026.

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Plaintiffs – investors – in the federal securities class action allege that they acquired Kyndryl stock at artificially inflated prices between August 7, 2024, and February 9, 2026, known as the “Class Period.” They are now seeking compensation for financial losses incurred upon public revelation of the company’s alleged misconduct during that time. To learn whether you may be eligible for a recovery under this securities lawsuit, click here.

What Does Kyndryl Do?

• Kyndryl is a self-described leading provider of mission-critical enterprise technology services.

• Accordingly, the company makes cloud services; core enterprise and zCloud services; application, data, and artificial intelligence services available to its customers. Additional services supposedly offered by the company include digital workplace services; security and resiliency services; and network services and edge services.

• As the self-proclaimed largest global IT infrastructure services provider, the company also designs, builds, manages and modernizes the complex information systems.

• Kyndryl’’s customers do business in numerous industries, including but not limited to financial, healthcare, public, technology, media and telecom and retail. In all, it says it has thousands of customers in more than 60 countries.

Why are Investors Suing Kyndryl?

The company and three of its current and/or former senior officers (the “Individual Defendants”) are accused of deceiving investors by lying and withholding important information about Kyndryl’s business practices and prospects during the Class Period.

Specifically, they are accused of omitting truthful information about the adequacy of the company’s internal controls and ,the accuracy of its financial statements during the Class Period, from SEC filings and related material. By knowingly or recklessly doing so, they allegedly caused Kyndryl stock to trade at artificially inflated prices during the time in question.

The truth came out, claim investors, before the market opened on February 9, 2026. That’s when Kyndryl filed a form with the SEC advising the Commission that it wouldn’t be able to meet the deadline for filing its Quarterly Report on Form 10-Q for the quarter ended December 31, 2025. In this context, Kyndryl revealed that: “The Company, through the Audit Committee of its Board of Directors, is reviewing its cash management practices, related disclosures (including regarding the drivers of the company’s adjusted free cash flow metric), the efficacy of the company’s internal control over financial reporting, and certain other matters following the company’s receipt of voluntary document requests from the Division of Enforcement of the Securities and Exchange Commission (“SEC”) relating to such matters.”

Taking a Closer Look

As alleged, the company and/or Individual Defendants repeatedly made false and misleading public statements throughout the Class Period.

In a quarterly report filed with the SEC at the beginning of the Class Period, for instance, the company stated in relevant part: “Based on that evaluation, the Chief Executive Officer and Chief Financial Officer have concluded that the Company’s disclosure controls and procedures were not effective as of the end of the period covered by this report due to a material weakness in internal control over financial reporting in the area of our information technology general controls (“ITGCs”) that was disclosed in Part II, Item 9A of the Company’s Form 10-K.”

Then, in a quarterly report filed with the SEC on November 7, 2024, the company stated: “There have been no changes in the Company’s internal control over financial reporting… that occurred during the quarter ended September 30, 2024 that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting other than the ongoing remediation of the ITGC deficiencies described below.”

Lastly, in an annual report filed with the SEC on May 30, 2025, Kyndryl stated in relevant part: “… the Chief Executive Officer and Chief Financial Officer have concluded that the Company’s disclosure controls and procedures were effective as of the end of the period covered by this report.”

Actions You May Take

If you have purchased the Company’s stock during the Class Period, you may join the class action as a lead plaintiff, remain a passive class member, or opt out of this litigation and pursue individual claims that may not be available to the class as a whole. To learn more about your options, click here.

The deadline to file for lead plaintiff in this class action is April 13, 2026.

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