Kyndryl Faces Class Action Lawsuits Over Financial Reporting Issues

Investors have until April 13, 2026 to join lawsuits against the IT services company

Mar. 25, 2026 at 3:21am

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Kyndryl Holdings, Inc. has been hit with class action lawsuits over alleged securities fraud between August 2024 and February 2026. The lawsuits claim the company failed to properly report material weaknesses in its internal financial controls and the departure of key executives, leading to a 55% stock price drop on February 9, 2026. Investors who suffered losses during this period have until April 13, 2026 to join the legal action.

Why it matters

The lawsuits highlight ongoing concerns about Kyndryl's financial reporting and corporate governance practices, which could have broader implications for the company's reputation and future performance. The case also underscores the importance of robust internal controls and transparency for publicly traded firms.

The details

According to the class action filings, Kyndryl disclosed on February 9, 2026 that it would be unable to timely file its Q3 2025 financial report. The company also said it anticipated reporting material weaknesses in its internal financial controls for the full 2025 fiscal year and first two quarters of 2026. This included issues with certain company functions and controls related to information, communication, and 'tone at the top'. Kyndryl also announced the departures of its CFO and General Counsel. Following this news, Kyndryl's stock price plummeted 55% to $10.59 per share.

  • On February 9, 2026, Kyndryl disclosed financial reporting issues and executive departures.
  • The class action lawsuits cover the period from August 1, 2024 to February 9, 2026.
  • Investors have until April 13, 2026 to join the class action lawsuits.

The players

Kyndryl Holdings, Inc.

An IT services company that was spun off from IBM in 2021.

Kahn Swick & Foti, LLC

A law firm representing investors in the class action lawsuits against Kyndryl.

Charles C. Foti, Jr.

A partner at Kahn Swick & Foti and former Attorney General of Louisiana.

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What they’re saying

“Kyndryl investors should contact KSF Managing Partner Lewis Kahn toll-free at 1-877-515-1850, or via email (lewis.kahn@ksfcounsel.com), or visit https://www.ksfcounsel.com/cases/nyse-kd/ to learn more.”

— Lewis Kahn, Managing Partner, Kahn Swick & Foti, LLC

What’s next

The judge will decide by April 13, 2026 whether to appoint a lead plaintiff in the class action lawsuits against Kyndryl.

The takeaway

The Kyndryl case highlights the importance of strong internal financial controls and transparent reporting for publicly traded companies. Investors will be closely watching how these lawsuits unfold and the impact on Kyndryl's future performance.