IBM Spinoff Kyndryl Faces Accounting Probe, CFO Exit

Kyndryl's stock plunges 50% as the company investigates cash management practices and internal controls

Published on Feb. 10, 2026

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Kyndryl Holdings, the former IBM managed IT services business, disclosed that its audit committee is reviewing the company's accounting practices following voluntary document requests from the SEC's Division of Enforcement. The review is focused on cash management practices, related disclosures, and the effectiveness of internal control over financial reporting. The company's CFO and General Counsel have departed, and interim replacements have been named. Kyndryl's stock price dropped over 50% on the news.

Why it matters

The accounting probe and executive departures raise concerns about Kyndryl's governance and internal controls, which could undermine investor confidence in the company's turnaround efforts after its spin-off from IBM. The sudden exits of the CFO and General Counsel are seen as red flags, signaling potential deeper issues within the company's finance and compliance functions.

The details

Kyndryl's audit committee is examining the company's cash management practices, related disclosures (including how it presents adjusted free cash flow), the effectiveness of internal control over financial reporting, and related matters in response to the SEC's voluntary information requests. This review is delaying completion of the quarterly report and the company's internal control assessment, but Kyndryl does not expect any impact on its consolidated financial statements. CFO David Wyshner and General Counsel Edward Sebold have departed their positions, effective immediately, and Harsh Chugh has been appointed interim CFO, Bhavna Doegar as interim corporate controller, and Mark Ringes as interim general counsel.

  • On Monday, Kyndryl disclosed the accounting probe and executive departures.

The players

Kyndryl Holdings

A tech company that was formerly IBM's managed IT services business and is now facing an accounting investigation and executive turnover.

David Wyshner

The former CFO of Kyndryl who has departed the company.

Edward Sebold

The former General Counsel of Kyndryl who has departed the company.

Harsh Chugh

The interim CFO of Kyndryl, who previously held leadership roles at IBM.

Shivaram Rajgopal

An accounting professor at Columbia Business School who commented on the implications of the executive departures.

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What they’re saying

“The red flags are already out—two senior executives responsible for the integrity of financial statements are gone. What else can you look for? What does this say about the internal controls of the whole company? Is this a rotten apple (isolated) or a rotten barrel (more systemic)?”

— Shivaram Rajgopal, Accounting Professor, Columbia Business School

What’s next

The company's audit committee is continuing its review of the accounting practices and internal controls, and the results of this investigation will be closely watched by investors.

The takeaway

The accounting probe and executive departures at Kyndryl raise serious questions about the company's governance and financial reporting, which could undermine investor confidence in its turnaround efforts following the spin-off from IBM. Restoring trust in Kyndryl's finance and compliance functions will be crucial for the company's long-term success.