Klarna Faces U.S. Securities Class Action Over IPO Disclosures on BNPL Loss Reserves

New updates have been reported about Klarna.

Klarna Group plc is the target of a U.S. securities class action alleging that the company misled investors about credit risk and loss reserves in connection with its September 2025 NYSE initial public offering. The suit, filed in the Eastern District of New York (Nayak v. Klarna Group plc, et al., No. 25‑cv‑7033), claims Klarna and certain executives failed to adequately disclose the likelihood and scale of reserve increases tied to its buy now, pay later (BNPL) loan portfolio in the IPO registration statement and prospectus. Plaintiffs assert that Klarna materially understated the risk that loss reserves would rise within months of the offering, given the risk characteristics of many BNPL borrowers, and that the company either knew or should have known this based on its underwriting profile and internal data. When subsequent information allegedly revealed higher‑than‑indicated credit losses and reserve needs, investors are claimed to have suffered losses as Klarna’s securities declined.

The case, which is organized as a putative class action on behalf of purchasers of Klarna securities traceable to the IPO, seeks to hold the company and named executives liable under U.S. federal securities laws for purportedly false and misleading statements and negligent preparation of offering materials. The litigation, if it proceeds, could carry financial exposure in the form of settlements, judgments, legal expenses, and potential insurance impacts, as well as reputational and regulatory scrutiny around Klarna’s BNPL risk management, disclosure practices, and reserve modeling. Investors with substantial losses have until February 20, 2026, to move for appointment as lead plaintiff, a procedural step that will shape how aggressively the case is litigated and negotiated. For executives and stakeholders, the action underscores growing legal and regulatory focus on BNPL credit quality, the adequacy of risk disclosures in fintech IPOs, and the need for robust governance around loss reserving assumptions and communications to public markets.