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# Pagaya sues Klarna in United States over alleged trade secret misappropriation
- URL: https://www.theglobalbanker.com/pagaya-sued-klarna-in-united-states-over-alleged-trade-secret-misappropriation/
- Published: 2026-05-14T05:00:00.000Z
- Updated: 2026-10-02T15:34:40.000Z
- Description: Pagaya sued Klarna, alleging the BNPL firm sought to absorb Pagaya's trade secrets, use them to build competing underwriting capabilities, and cut Pagaya out, the fintech said in a filing.
- Author: TGB Editorial Team
- Tags: Fintech, Americas

Pagaya sued Klarna, alleging the buy now pay later firm sought to absorb Pagaya's trade secrets, use them to build competing underwriting capabilities, and cut Pagaya out, the underwriting fintech said in a complaint filed on 13 May in the US District Court for the District of Delaware, according to court records.

#### LEGAL ALLEGATIONS

The complaint alleged that Klarna "distilled Pagaya's core underwriting technology for POS loans and then willfully misappropriated its trade secrets." The suit is brought under the Defend Trade Secrets Act of 2016\. Pagaya also alleged that Klarna misrepresented its intention to expand the partnership while secretly developing competing capabilities.

The two companies have worked together since 2022, with Pagaya assessing subprime customers for Klarna at checkout.

#### RATINGS CONTEXT

KBRA, which rates two asset-backed securitisations of point-of-sale loans originated, or to be originated, through the Klarna platform using Pagaya's credit decisioning model, said it was monitoring the litigation.

**Sources: Pagaya v. Klarna complaint, US District Court for the District of Delaware; KBRA**[](https://www.bankingdive.com/news/pagaya-sues-klarna-over-alleged-trade-secret-misappropriation/822550/)