Klarna Faces U.S. Securities Class Action Over IPO Disclosures and BNPL Credit Risk

New updates have been reported about Klarna.

Klarna Group plc is facing a securities class action lawsuit in the United States tied to its September 2025 initial public offering (IPO), with plaintiffs alleging that the company and certain executives failed to properly disclose material risks related to its buy now, pay later (BNPL) business. The case, filed in the U.S. District Court for the Eastern District of New York (Nayak v. Klarna Group plc, et al., No. 25-cv-7033), centers on claims that Klarna’s IPO registration statement and prospectus understated the likelihood and magnitude of near-term increases in loss reserves, given the risk profile of many BNPL borrowers. Investors who bought Klarna securities pursuant or traceable to the IPO documents are the putative class, and the lead-plaintiff application deadline has been set for February 20, 2026. The complaint asserts that these alleged misstatements and omissions rendered Klarna’s public disclosures materially false, misleading, and negligently prepared, and that subsequent market revelations led to investor losses.

For Klarna, the litigation introduces potential financial and reputational risk at a critical stage following its U.S. listing, particularly as regulators and markets continue to scrutinize BNPL credit quality, reserve adequacy, and consumer risk. An adverse outcome or sizable settlement could increase Klarna’s cost of capital, prompt changes to its risk management and disclosure practices, and potentially affect its growth strategy or profitability targets if higher loss provisioning is required. Even before resolution, the lawsuit may drive greater investor focus on Klarna’s underwriting standards, credit models, and reserve methodologies for BNPL loans, and could influence how peers in the sector communicate portfolio risk and reserve assumptions. While the immediate impact is legal and contingent in nature, the case underscores structural concerns around BNPL credit performance in a shifting macro environment and may shape future regulatory and market expectations for Klarna’s reporting and risk governance.