Kyndryl Files Amended Reports, Internal Controls Ineffective

Kyndryl filed two amended quarterly reports and one amended annual report providing further detail about problems reported on February 9. The recent filings reveal that "the company's disclosure controls and procedures and internal control over financial reporting were ineffective" as of March 31, June 30, and September 30, 2025. Each specified that "senior finance executives failed to set an appropriate tone at the top[.]" In addition, Kyndryl said "there was a lack of transparency with the company's CEO, the Audit Committee of the Board and the Board such that disclosure processes, including with respect to cash management practices regarding deferring vendor payments quarter to quarter, were impacted." The developments come after investors saw Kyndryl shares crater 55% on February 9, after the company announced that it would not timely file its quarterly report for the quarter ended December 31, 2025, anticipated reporting material internal control weaknesses, suffered C-Suite abrupt departures, and has come under SEC scrutiny. A securities class action lawsuit is pending and seeks to represent investors who purchased or otherwise acquired Kyndryl securities between August 7, 2024 and February 9, 2026. These developments and severe market reaction have prompted national shareholder rights law firm Hagens Berman to continue its investigation into claims that Kyndryl violated the federal securities.