The Financial Conduct Authority (FCA) has imposed a hefty fine on Wise CEO Kristo Käärmann for failing to disclose tax liabilities.
- Käärmann’s non-disclosure related to a capital gains tax liability from a £10 million share sale in 2017.
- Käärmann previously faced a £365,651 penalty from HM Revenue & Customs in 2021 for the same matter.
- His name was consequently added to the public tax defaulters list.
- The FCA’s investigation, initiated in 2022, deemed the incident significant to its evaluation of Käärmann’s conduct.
The Financial Conduct Authority has taken decisive action against Kristo Käärmann, the CEO of Wise, following his failure to notify the organisation about a substantial capital gains tax liability. In a substantial penalty reflective of the seriousness of the breach, Käärmann has been fined £350,000.
This financial penalty stems from a situation where Käärmann did not reveal a tax liability after he sold shares that were valued at £10 million back in 2017. Such financial transactions necessitate transparency, especially given the regulatory expectations surrounding senior management roles.
In 2021, HM Revenue & Customs fined Käärmann £365,651 for deliberately overlooking the obligation to inform them about his capital gains tax liability. This incident not only attracted a significant fine but also led to his inclusion on the public tax defaulters list, marking him as someone who failed to uphold tax responsibilities.
The FCA initiated an investigation in 2022 to scrutinise Käärmann’s actions closely. This investigation was crucial in assessing whether Käärmann had breached senior management conduct rule four, which mandates the appropriate disclosure of information the FCA would reasonably expect to be informed about.
For senior figures such as Käärmann, the expectation to maintain transparency in tax affairs is not just a legal obligation but a reflection of professional integrity. The FCA’s action underlines the importance of these principles in maintaining the public’s trust in financial sectors.
The imposition of this fine underscores the importance of transparency and compliance in senior management roles.
