The Kyndryl lawsuit landscape in 2026 centers on a securities fraud class action filed after a February disclosure of internal control failures, executive departures, and an SEC inquiry sent shares of the IBM spinoff down more than 54% in a single day. The company also faces two employment discrimination cases in the Southern District of New York, and is itself the plaintiff in a breach-of-contract action against Computer Sciences Corporation and DXC Technology.
The Securities Fraud Class Action
The first case, Brander v. Kyndryl Holdings, Inc., et al. (Case No. 1:26-cv-00782), was filed in the U.S. District Court for the Eastern District of New York before Judge Diane Gujarati. It covers a class period of August 7, 2024 through February 9, 2026, and names Kyndryl alongside three individuals: CEO and Chairman Martin Schroeter, former CFO David Wyshner, and former Controller Vineet Khurana.1Kessler Topaz Meltzer & Check, LLP. Kyndryl Holdings Inc. Class Action Lawsuit2Zimmerman Law Offices. Kyndryl Holdings Inc. Class Action Lawsuit
The complaint alleges the executives signed quarterly filings certifying that Kyndryl’s internal controls were effective and its financial reporting accurate while the underlying practices were unsound. It points to Form 10-Q certifications dated August 7, 2024, November 7, 2024, and February 6, 2025, in which Schroeter and Wyshner acknowledged preexisting IT control weaknesses but stated those “did not result in a misstatement.” Plaintiffs say the February 2026 admissions contradicted that assurance.2Zimmerman Law Offices. Kyndryl Holdings Inc. Class Action Lawsuit
An expanded complaint followed on March 17, 2026, filed by Saxena White P.A. on behalf of Westchester Putnam Counties Heavy & Highway Laborers Local 60 Benefit Funds (Case No. 1:26-cv-02211, S.D.N.Y.). That action uses a slightly different class period, August 1, 2024 through February 6, 2026, and adds detail about how Kyndryl’s free cash flow figures were “improperly presented” as evidence of operational strength when the underlying cash generation depended on timing manipulation.3Saxena White P.A. Saxena White P.A. Files New Securities Class Action Lawsuit Against Kyndryl Holdings Inc.
The lead plaintiff deadline in the Brander action was April 13, 2026.4PR Newswire. Kyndryl Holdings Inc. Class Action Lawsuit: Investors Face April 13, 2026, Deadline No class had been certified as of mid-2026.
What Triggered the Case
On February 9, 2026, Kyndryl told investors it could not file its Form 10-Q for the quarter ending December 31, 2025, on time because its audit committee was reviewing cash management practices, related disclosures, and the effectiveness of internal controls over financial reporting. The same day, the company disclosed voluntary document requests from the SEC’s Division of Enforcement.5SEC.gov. Kyndryl Holdings Inc. NT 10-Q Filing
Three senior executives left that day. CFO David Wyshner and General Counsel Edward Sebold departed “effective immediately,” and Global Controller Vineet Khurana stepped down from his role but moved to a different position within the company.6CRN. Kyndryl Stock Falls 55 Percent Following SEC Document Request, CFO and General Counsel Exits Mark Ringes was named interim general counsel.7CIO.com. Kyndryl Replaces Financial Leadership, Cites Weak Reporting Controls
Kyndryl also warned it expected to report material weaknesses in internal controls across all of fiscal year 2025 (ended March 31, 2025) and the first two quarters of fiscal 2026. Its earlier assessment that controls were effective, along with PricewaterhouseCoopers’ related audit opinion, “should no longer be relied upon.”8BusinessWire. Kyndryl Holdings Inc. Notice of Application Deadline for Class Action Lawsuit
Shares fell from a $23.49 close on February 6 to $10.59 on February 9, a loss of roughly $12.90 per share and more than $3 billion in market capitalization.1Kessler Topaz Meltzer & Check, LLP. Kyndryl Holdings Inc. Class Action Lawsuit9BusinessWire. Kyndryl Holdings Shares Crater Amid Late Filing, Abrupt CFO and GC Departures, SEC Investigation
The Vendor Payment Practice at the Center of the Case
According to the expanded complaint and Kyndryl’s own subsequent filings, certain executives had systematically deferred vendor payments from one quarter to the next, which inflated the company’s reported free cash flow in a given period.3Saxena White P.A. Saxena White P.A. Files New Securities Class Action Lawsuit Against Kyndryl Holdings Inc. What was presented to investors as operational cash generation relied on timing manipulation of payables.
On February 9, Kyndryl cut its full-year fiscal 2026 free cash flow guidance from $550 million to a range of $325 million to $375 million.10Saxena White P.A. Kyndryl Holdings Inc. Class Action Complaint An amended 10-K and the delayed 10-Q, both filed February 17, 2026, confirmed the material weaknesses related specifically to disclosure practices “including with respect to certain cash management practices regarding deferring vendor payments quarter to quarter.”11PR Newswire. Kyndryl Announces Filing of Form 10-Q for Quarter Ended December 31, 2025
The amended 10-K identified three categories of material weakness: “senior finance tone at the top,” failures in “disclosure communications,” and “inadequate handling of hotline and other complaints.” PricewaterhouseCoopers revised its prior opinion and concluded Kyndryl’s internal controls were “not effective” for fiscal 2025. The auditor affirmed, however, that the underlying financial statements — including $15.1 billion in revenue and $252 million in net income — remained “fairly stated” and required no restatement.12Stock Titan. Kyndryl Holdings Inc. Amends Annual Report (10-K/A)
Kyndryl’s Response
CEO Martin Schroeter addressed the matter on the company’s fiscal second-quarter conference call. “We are cooperating with the SEC,” he said. “We do not expect a restatement or other impact to our financial statements. Due to the ongoing nature of these matters, we will not be able to comment further at this time.”13The Register. Kyndryl To Review Accounting Practices, Execs Depart Asked whether the executive exits were connected to the accounting review, Schroeter declined to elaborate.14SiliconANGLE. Kyndryl Shares Plunge Amid Accounting Review, Leadership Shakeup
The company said it began a remediation plan that includes updated training on disclosure controls and Sarbanes-Oxley requirements, enhanced disclosure committee responsibilities, and improved handling of its reporting hotline.15CFO Dive. Kyndryl Touts Strong Financial Position, Delayed 10-Q Kyndryl has maintained throughout that no financial restatement is necessary.11PR Newswire. Kyndryl Announces Filing of Form 10-Q for Quarter Ended December 31, 2025
Age Discrimination Collective Action
In Doheny v. International Business Machines Corp. (Case No. 1:23-cv-03962, S.D.N.Y.), former business development executive MaryKathryn Doheny brought a collective action alleging Kyndryl continued a pattern of age discrimination inherited from IBM, terminating a disproportionate number of workers over 40 during company-wide layoffs.16Bloomberg Law. IBM Spinoff Kyndryl Keeps Plot To Fire Older Workers, Suit Says
In February 2024, the court granted IBM’s motion to dismiss in full but allowed Doheny’s individual age discrimination claim and the collective pattern-or-practice claim to proceed against Kyndryl. Claims by co-plaintiff Tony DeGruccio and four opt-in plaintiffs were dismissed with prejudice because of prior arbitration and release agreements.17CourtListener. Doheny v. International Business Machines Corp. The case remained active with ongoing discovery in mid-2026.
Discrimination and Whistleblower Retaliation Case
In O’Reilly v. Kyndryl Holdings, Inc. (Case No. 1:25-cv-08354, S.D.N.Y.), five former members of Kyndryl’s internal IT security team allege they were fired based on race, national origin, age, and disability. The plaintiffs — Aaron O’Reilly, Rahul Bakshi, Mustapha Salaudeen, Wai Tam, and Rishidhar Vangapelly — also allege retaliation for whistleblowing. The complaint says they discovered sexually explicit and child sexual abuse material on company systems and that management tried to suppress their reports to protect Kyndryl’s stock price and public image. O’Reilly, described as a white disabled veteran, alleges he was placed on administrative leave after raising concerns and never cleared to return.18The Register. Kyndryl Sued for Firing Non-White Workers, Disabled Vet
The case was filed in October 2025. As of April 2026, a motion to dismiss had been briefed, a protective order had been entered, and the case was proceeding through early discovery.19CourtListener. O’Reilly v. Kyndryl Holdings Inc.
Kyndryl’s Contract Suit Against CSC and DXC
Kyndryl is the plaintiff in a breach-of-contract case against Computer Sciences Corporation and DXC Technology Company, filed in December 2025 in the District of Massachusetts (Case No. 1:25-cv-13943) before Judge F. Dennis Saylor IV. The defendants filed an answer and counterclaim in February 2026, and both sides have filed motions to dismiss. A hearing on those motions was held on May 28, 2026, and the court took the matter under advisement.20CourtListener. Kyndryl Inc. v. Computer Sciences Corporation21PACER Monitor. Kyndryl Inc. v. Computer Sciences Corporation et al Specific terms of the dispute have not been detailed in publicly available docket entries.