Kyndryl (US:KD) TMX Newsfile·2026-02-12 02:58Core Viewpoint - A securities class action lawsuit has been filed against Kyndryl Holdings, Inc. for allegedly misleading investors regarding its financial statements and internal controls during the class period from August 7, 2024, to February 9, 2026 [1][3]. Company Developments - Kyndryl shares experienced a significant decline of $12.90, or 55%, on February 9, 2026, following the announcement that the company would not file its quarterly report on time due to material internal control weaknesses and executive departures [2][7]. - The company disclosed that its Audit Committee is reviewing cash management practices and internal controls, which are expected to reveal material weaknesses for the fiscal year ending March 31, 2025, and the first two quarters of fiscal year 2026 [6]. Allegations and Legal Actions - The lawsuit claims that Kyndryl made false and misleading statements, particularly regarding the effectiveness of its internal controls and the accuracy of its financial reporting [5][8]. - The complaint highlights that Kyndryl's financial statements during the class period were materially misstated and that the company failed to adequately disclose issues with its internal controls [5]. Market Reaction - The market reacted severely to Kyndryl's disclosures, resulting in a loss of over $3 billion in market capitalization in a single day [7]. - The law firm Hagens Berman is investigating whether Kyndryl intentionally misled investors about its cash management practices, which are critical in an industry focused on free cash flow [8].