Kyndryl Faces Accounting Probe, CFO Exit Amid 50% Stock Dive

The IBM spinoff is reviewing its cash management practices and internal controls after SEC requests, leading to executive departures.

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, cash management, and internal controls following voluntary document requests from the SEC's Division of Enforcement. This review has delayed the company's quarterly reporting, and the CFO and general counsel have departed their roles. Kyndryl's stock price dropped over 50% on the news, raising concerns about the company's governance and financial integrity.

Why it matters

Kyndryl was spun off from IBM in 2021 and was aiming to deliver a turnaround story, but this accounting probe and executive shakeup raise red flags about the company's internal controls and financial reporting. Investors are understandably nervous when both the CFO and general counsel depart, as it signals potential issues with the integrity of the company's financial statements and overall governance.

The details

Kyndryl's audit committee is examining its 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 the 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 audit committee review and executive departures.

The players

Kyndryl Holdings

The former IBM managed IT services business that was spun off in 2021 and is now facing an accounting probe.

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 appointed at Kyndryl.

Bhavna Doegar

The interim corporate controller appointed at Kyndryl.

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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 (Fortune)

“Long term, Kyndryl needs a permanent CFO who is controls-first and cash-disciplined, not just market-facing. The right profile has real accounting depth (ideally controllership- or chief accounting officer–caliber fluency), can pressure-test free cash flow mechanics, and will install durable checks and balances across controllership, reporting, and governance.”

— Shawn Cole, President and Founding Partner, Cowen Partners (Fortune)

What’s next

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The takeaway

This case highlights growing concerns in the community about repeat offenders released on bail, raising questions about bail reform, public safety on SF streets, and if any special laws to govern autonomous vehicles in residential and commercial areas.