Wise CEO Kristo Käärmann has been slapped with a £350,000 fine by the FCA for a breach of senior manager conduct relating to his failure to immediately report a default on his tax bill.
In February 2021, Käärmann was fined £365,651 by HM Revenue & Customs after he was found to have deliberately failed to notify the tax office of a capital gains tax liability after he sold shares worth £10m in 2017. In September 2021, HMRC subsequently added Käärmann to their public tax defaulters list. His name was removed from the list in 2022.
The FCA has now hit Käärmann with a further fine after he waited seven months before notifying the regulator of the tax issues.
The FCA issued the fine after determining that Käärmann was in breach of Senior Management Conduct Rule 4, which states: "You must disclose appropriately any information of which the FCA would reasonably expect notice."
Therese Chambers, joint executive director of enforcement and oversight says: "We, and the public, expect high standards from leaders of financial firms, including being frank and open.
"It should have been obvious to Mr Käärmann that he needed to tell us about these issues which were highly relevant to our assessment of his fitness and propriety."
Responding, Wise says: "The FCA has not made any adverse findings regarding Kristo’s continued fitness and propriety to perform his current roles at Wise, nor found that he acted with a lack of integrity."
Wise chair David Wells, elaborates: “The Board continues to take Wise’s regulatory obligations very seriously. Following the inclusion of Kristo’s name on HMRC’s list in September 2021, the Board conducted its own investigation and assessed that Kristo remained fit and proper to continue in his roles at Wise. The Board also required him to take remedial actions to ensure that his personal tax affairs are appropriately managed and is satisfied that these actions were taken.”