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FCA fines Wise boss £350k for tax omission

Kristo Käärmann, the billionaire co-founder and chief executive of the money transfer company Wise, has been fined £350,000 by the financial regulator over his failure to notify it about “significant tax issues”.
The Financial Conduct Authority (FCA) said that Käärmann failed to notify the regulator initially about a previous tax issue and fine during an assessment in 2021 of whether he was “fit and proper” to run a company.
HM Revenue & Customs fined him £365,651 in February 2021 for deliberately failing to notify them of a capital gains tax liability after he sold shares worth £10 million in 2017. In September 2021 it added him to its public tax defaulters’ list.
“Käärmann failed to appropriately consider the significance of the tax issues and notify the FCA, despite being aware of them for over seven months,” the FCA said.
The FCA said that Käärmann breached its rules of conduct for senior managers. Senior managers “must disclose appropriately any information of which the FCA would reasonably expect notice”.
Käärmann is “an approved person” under the FCA’s senior managers regime; the regulator can fine a manager or prevent them from working in financial services altogether if they are not considered “fit and proper”.
His fine was reduced from a potential £500,000 after he agreed to resolve the matter.
Therese Chambers, the FCA’s joint executive director of enforcement and oversight, said: “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.”
Käärmann said: “After several years and full cooperation with the FCA, we have brought this process to a close. I remain focused on delivering the mission for Wise and achieving our long-term vision for being ‘the’ network for the world’s money.”
David Wells, chairman of Wise, said: “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. We’re pleased that the FCA’s conclusions are consistent with Wise’s own assessment in 2021, and that the matter is now closed in its entirety.”

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