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

New updates have been reported about Klarna.

Klarna Group plc is facing a securities class action in the U.S. District Court for the Eastern District of New York alleging that the company and certain executives misled investors in connection with its September 2025 IPO. The complaint centers on Klarna’s registration statement and prospectus, claiming the company failed to adequately disclose the likelihood and scale of future increases in loss reserves tied to its buy now, pay later (BNPL) portfolio. According to the lawsuit, Klarna allegedly knew or should have known, based on the risk profile of its BNPL borrowers, that credit losses were poised to rise materially within months of the IPO, yet investors were not appropriately warned of this risk. Plaintiffs argue that these alleged omissions made Klarna’s public statements materially false, misleading, and negligently prepared, and that investors suffered losses when the true loss reserve trajectory became apparent.

The case, titled Nayak v. Klarna Group plc, et al., No. 25-cv-7033, seeks to establish a class of investors who bought Klarna securities pursuant or traceable to the IPO documents, with a February 20, 2026 deadline for investors to seek lead-plaintiff status. While no liability has been established and Klarna has not publicly responded in this notice, the litigation raises potential financial and reputational risks, including possible settlement costs, higher disclosure and compliance burdens, and increased scrutiny of Klarna’s credit risk modeling and BNPL underwriting standards. For executives and stakeholders, the suit underscores growing regulatory and investor focus on how BNPL providers quantify and communicate credit risk and loss reserves in offering documents, and it may influence Klarna’s future capital markets strategy, disclosure practices, and risk management posture in the U.S. and other key markets.