Faruqi & Faruqi Reminds Klarna Investors of Securities Class Action Deadline

Lawsuit alleges Klarna understated risk of loan losses ahead of IPO

Published on Feb. 25, 2026

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Faruqi & Faruqi, LLP, a national securities law firm, is investigating potential claims against Klarna Group plc and reminds investors of the February 20, 2026 deadline to seek the role of lead plaintiff in a federal securities class action. The lawsuit alleges Klarna violated federal securities laws by making false and/or misleading statements about the risk of its loan losses increasing shortly after its September 2025 IPO.

Why it matters

The case highlights concerns about Klarna's risk management and transparency ahead of its public offering, which could have significant implications for investors who suffered losses. Securities class actions aim to hold companies accountable for alleged misconduct that impacts shareholders.

The details

The complaint alleges Klarna and its executives violated securities laws by understating the risk that its loan loss reserves would materially increase within a few months of the IPO, which they either knew or should have known given the risk profile of Klarna's buy now, pay later loans. When the true details emerged in November 2025, with Klarna reporting higher than expected loan loss provisions, the stock price fell 9.3%.

  • Klarna went public in September 2025.
  • On November 18, 2025, Klarna reported higher loan loss provisions in its Q3 earnings.
  • The securities class action lawsuit has a February 20, 2026 deadline for investors to seek lead plaintiff status.

The players

Faruqi & Faruqi, LLP

A leading national securities law firm that is investigating potential claims against Klarna and representing investors in the class action lawsuit.

Klarna Group plc

A financial technology company that provides buy now, pay later services and went public in September 2025.

James (Josh) Wilson

A Faruqi & Faruqi partner who is encouraging investors who suffered losses over $100,000 in Klarna to contact him directly.

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What they’re saying

“Faruqi & Faruqi partner Josh Wilson directly at 877-247-4292 or 212-983-9330 (Ext. 1310).”

— James (Josh) Wilson, Faruqi & Faruqi Partner (Newsfilecorp)

What’s next

The court will decide on the lead plaintiff for the securities class action lawsuit by the February 20, 2026 deadline.

The takeaway

This case highlights the importance of accurate risk disclosure by companies going public, as investors rely on this information to make informed decisions. The lawsuit alleges Klarna failed to properly warn investors about the potential for rising loan losses, leading to significant stock price declines.