Kyndryl Holdings (KD) Faces Securities Class Action Amid 55% Stock Drop After Four Bombshell Disclosures - Hagens Berman

SAN FRANCISCO, Feb. 12, 2026 /PRNewswire/ -- A securities class action lawsuit has been filed against Kyndryl Holdings, Inc. (NYSE: KD) and seeks to represent investors who purchased or otherwise acquired Kyndryl securities between August 7, 2024 and February 9, 2026.

The lawsuit follows the sharp selloff in Kyndryl shares (-$12.90, -55%) on February 9, 2026, after the company announced that it would not timely file its quarterly report for the quarter ended December 31, 2025, material internal control weaknesses including "tone at the top" communications, senior executive departures, and an SEC document request.

These developments and severe market reaction have prompted national shareholder rights law firm Hagens Berman to continue its investigation into whether Kyndryl may have violated the federal securities. The firm urges Kyndryl investors who suffered significant losses to contact the firm now to discuss their rights.

Class Period: Aug. 7, 2024 – Feb. 9, 2026
Lead Plaintiff Deadline: Apr. 13, 2026

Visit: www.hbsslaw.com/investor-fraud/kd

Contact the Firm Now: [email protected]
844-916-0895

Kyndryl Holdings, Inc. (KD) Securities Class Action:

In the past, infrastructure services company Kyndryl has emphasized "strong conversion of our earnings to free cash flow" and assured investors that its internal control over financial reporting is effective.

The complaint alleges that Kyndryl made false and misleading statements while withholding crucial information from investors. More specifically, the lawsuit alleges that Kyndryl's financial statements issued during the Class Period were materially misstated. In addition, it claims that the company lacked adequate internal controls and understated problems with its internal controls.

On February 9, 2026, Kyndryl made four startling disclosures.

First, the company notified investors that it would not timely file its quarterly report because Kyndryl's Audit Committee "is reviewing its cash management practices, related disclosures (including the drivers of the Company's free cash flow metric), [and] the efficacy of the Company's internal control over financial reporting[.]"

Second, Kyndryl disclosed that it anticipated reporting material weaknesses in its "internal control over financial reporting for the period covered in the quarterly report, as well as for the full fiscal year ended March 31, 2025, and the first two fiscal quarters of fiscal year 2026[.]" The company further specified that such weaknesses are expected to include controls  related to information and communication and "tone at the top."

Third, the company announced that Wyshner and Sebold departed on February 5, 2026, and its comptroller (Vineet Khurana) stepped down while assuming another position.

Fourth, Kyndryl revealed it received document requests from the Division of Enforcement of the SEC related to matters being reviewed by the Audit Committee.

The market's reaction was severe, as the price of Kyndryl shares plunged nearly 55% during trading that day, wiping out over $3 billion of market capitalization in a single day.

"We're investigating whether, having assured investors of the effectiveness of its internal controls and repeatedly touted free cash flow growth, Kyndryl may have intentionally misled investors about the propriety of its cash management practices in an industry that is keenly focused on free cash flow," said Reed Kathrein, the Hagens Berman partner leading the firm's investigation.

If you invested in Kyndryl and have substantial losses, or have knowledge that may assist the firm's investigation, submit your losses now »

If you'd like more information and answers to additional frequently asked questions about the firm's Kyndryl investigation, read more »

Whistleblowers: Persons with non-public information regarding Kyndryl should consider their options to help in the investigation or take advantage of the SEC Whistleblower program. Under the new program, whistleblowers who provide original information may receive rewards totaling up to 30 percent of any successful recovery made by the SEC. For more information, call Reed Kathrein at 844-916-0895 or email [email protected].

About Hagens Berman
Hagens Berman is a global plaintiffs' rights complex litigation firm focusing on corporate accountability. The firm is home to a robust practice and represents investors as well as whistleblowers, workers, consumers and others in cases achieving real results for those harmed by corporate negligence and other wrongdoings. Hagens Berman's team has secured more than $2.9 billion in this area of law. More about the firm and its successes can be found at hbsslaw.com. Follow the firm for updates and news at @ClassActionLaw. 

SOURCE Hagens Berman Sobol Shapiro LLP