Wise CEO Kristo Käärmann has been fined £350,000 by the FCA for failing to promptly report a default on his tax bill.
In February 2021, Käärmann received a £365,651 fine from HM Revenue & Customs after it was revealed that he did not inform the tax office about a capital gains tax liability following the sale of shares worth £10 million in 2017. He was subsequently added to HMRC’s public tax defaulters list in September 2021, only to be removed in 2022.
The FCA imposed the latest fine after determining that Käärmann delayed notifying the regulator about the tax issues for seven months. The FCA highlighted that this delay was a breach of Senior Management Conduct Rule 4, which requires senior managers to disclose any information that the FCA would reasonably expect to receive.
Therese Chambers, joint executive director of enforcement and oversight, stated, “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.”
In response, Wise noted that the FCA has not found any issues regarding Käärmann’s ongoing fitness and propriety for his current roles. Wise chair David Wells emphasized, “The Board takes Wise’s regulatory obligations very seriously. After Kristo’s name was added to HMRC’s list in September 2021, the Board conducted its own investigation and determined that he remained fit and proper to continue in his roles at Wise. We also mandated that he take remedial actions to manage his personal tax affairs appropriately, and we are satisfied that these actions were taken.”