In a recent legal development, a significant class action lawsuit has been filed against a major financial technology company accused of misleading investors during its initial public offering (IPO). The complaint was lodged by Dilip Nayak on December 22, 2025, in the United States District Court for the Eastern District of New York, targeting Klarna Group PLC and several associated individuals and entities.
The lawsuit alleges that Klarna Group PLC, a renowned payments company known for its "buy now, pay later" services, along with its executives and underwriters, violated federal securities laws by providing false and misleading information in their registration statement. According to the complaint, this misinformation led to investors suffering substantial financial losses. The plaintiff claims that the defendants failed to disclose critical risks associated with Klarna's credit practices and consumer base. Notably, it is alleged that many of Klarna's clients were financially unsophisticated or experiencing hardship, increasing the likelihood of defaults on loans used even for small purchases like fast food.
Klarna's IPO took place in September 2025, where approximately 34 million shares were offered at $40 each. However, since then, the company's stock has plummeted below its IPO price due to revelations about its financial health and credit risk management. As per the complaint, Klarna's financial disclosures understated potential credit losses and overestimated the company's ability to manage consumer credit risk effectively. This misrepresentation allegedly contravenes Sections 11, 12(a)(2), and 15 of the Securities Act of 1933.
The plaintiff seeks class-action status for all affected investors who purchased Klarna securities traceable to the IPO registration statement. They are demanding damages for the financial harm suffered due to these alleged violations. Additionally, they request reimbursement for legal costs incurred during this litigation process.
Representing Nayak in this legal battle is The Rosen Law Firm P.A., with attorneys Phillip Kim and Laurence M. Rosen leading the charge. The case is being overseen by Judge [Name not provided], under Case ID: 1:25-cv-07033.
Source: 125cv07033_Nayak_v_Klarna_Group_PLC_Complaint_Eastern_District_New_York.pdf