Wise's billionaire CEO fined £350,000 by UK regulators over failure to report tax issue
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LONDON — Kristo Käärmann, the billionaire CEO of money transfer firm Wise, was slapped with a £350,000 ($454 million) fine by financial regulators in the U.K for failing to report an issue with his tax filings.
Käärmann, who co-founded Wise in 2011 with fellow entrepreneur Taavet Hinrikus, was on Monday ordered by the Financial Conduct Authority (FCA) to pay the sizable penalty due to a breach of the watchdog's senior manager conduct rule.
The FCA said that Käärmann failed to notify the regulator about him not paying a capital gains tax liability when he cashed in on shares worth £10 million in 2017.
The watchdog found him in breach of its Senior Management Conduct Rule 4, which states: «You must disclose appropriately any information of which the FCA would reasonably expect notice.»
It comes after the Wise boss was hit with a separate £365,651 fine by U.K. tax collection agency Her Majesty's Revenue and Customs (HMRC) in 2021 for being late to submitting his tax returns during the 2017/18 tax year.
Käärmann's name was added to HMRC's public tax defaulters list. His tax liability for that year was £720,495, according to HMRC.
The FCA said Monday that, between February 2021 and September 2021, the tax issues were relevant to its assessment of Käärmann's fitness and propriety as a senior director of a financial services firm.
Käärmann failed to consider the significance of the issues and notify the FCA despite being aware of them for over seven months, the regulator added.
«We, and the public, expect high standards from leaders of financial firms, including being frank and open,» Therese Chambers, joint executive director of enforcement and oversight, said in a statement Monday.
«It should have been obvious
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