The Financial Conduct Authority (FCA) has imposed a £350,000 fine on Kristo Käärmann, CEO of Wise plc and senior manager at Wise Assets UK Ltd, for violating a senior manager conduct rule by failing to disclose tax issues to the regulator.
In February 2021, Käärmann paid a significant penalty to HM Revenue & Customs (HMRC) totaling £365,651 after being fined for not informing the tax authority of a capital gains tax liability following a 2017 sale of shares valued at £10 million.
Later that year, in September 2021, HMRC publicly listed Käärmann on its tax defaulters list.
The FCA’s assessment of Käärmann’s “fitness and propriety” as a senior manager was influenced by these developments, as well as the circumstances surrounding them.
The regulator noted that Käärmann, despite being aware of his tax issues for more than seven months, did not appropriately recognize the importance of these matters nor did he notify the FCA about them.
Therese Chambers, the FCA’s joint executive director of enforcement and oversight, emphasised the need for transparency from financial leaders.
“We, and the public, expect high standards from leaders of financial firms, including being frank and open,” she said.
She added, “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.”
Boluwatife Enome
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