Wise CEO handed £350,000 fine for manager conduct breach

Wise co-founder and CEO Kristo Käärmann has been fined £350,000 for breaching a senior manager conduct rule.

The fintech executive was fined by the Financial Conduct Authority (FCA) for not disclosing to the watchdog previous regulatory breaches during its assessment of his fitness and propriety.

The FCA said Käärmann did not properly consider the significance of his previous run-in with HM Revenue and Customs (HMRC) during the FCA’s assessment.

Käärmann was handed a £365,651 fine in February 2021 for deliberately failing to notify the UK tax authorities of a capital gains liability following his sale of £10m worth of shares in 2017.

The Wise boss was later added to HMRC’s public tax defaulters list. An investigation into Käärmann was launched by the FCA in June 2022 regarding his “regulatory obligations and standards”.

According to the FCA, Käärmann failed to address this issue in cooperation with the regulator’s investigation despite being aware of the matter for over seven months.

This is a breach of the UK’s Senior Management Conduct rules, specifically, rule four, which states: “You must disclose appropriately any information of which the FCA would reasonably expect notice”.

“We, and the public, expect high standards from leaders of financial firms, including being frank and open,” said Therese Chambers, joint executive director of enforcement and oversight at the FCA.

“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.”

Käärmann would have been fined £500,000, however, received a reduced fine for his cooperation to resolve the matter.

The chief executive co-founded Wise in 2011 with Taavet Hinrikus. The international money transfer company, which went public in London in 2021, posted positive quarterly growth in October as it looks to continue boosting its profits.

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