The FCA has fined Kristo Käärmann, the CEO of Wise plc and senior manager of Wise Assets UK Ltd, £350,000 for breaching a senior manager conduct rule. 

Wise is a multi-currency payment and banking system which claims 16m customers worldwide. Its Wise Assets arm also provides an investment service allowing customers to invest in stocks and shares.

The firm was launched in 2011 and is listed on the London Stock Exchange.

The regulator said that Mr Käärmann’s failing related to failure to declare a CGT liability.

In February 2021, he paid a significant fine to HMRC of £365,651 for deliberately failing to notify HMRC of a capital gains tax liability after he sold shares worth £10m in 2017.

In September 2021, HMRC subsequently added Mr Käärmann to their public tax defaulters list. 

Between February 2021 and September 2021, the matters were deemed relevant to the FCA’s assessment of Mr Käärmann’s fitness and propriety but the watchdog said Mr Käärmann failed to “appropriately consider” the significance of the tax issues and notify the FCA, despite being aware of them for over seven months.  

Therese Chambers, 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 which were highly relevant to our assessment of his fitness and propriety.” 

The FCA issued the fine after determining that Mr Käärmann was in breach of Senior Management Conduct Rule 4, which states: “You must disclose appropriately any information of which the FCA would reasonably expect notice.” 

The FCA says its Senior Managers and Certification Regime aims to reduce harm to consumers and strengthen market integrity by creating a system that enables firms and regulators to hold people to account.  

Mr Käärmann is the CEO of Wise plc, and director of two FCA regulated firms, which form part of the Wise group: Wise Assets UK Ltd and Wise Payments Ltd. He held two senior manager functions at Wise Assets UK Ltd (SMF1 - chief executive and SMF3 - executive director) between February 2021 and September 2021. 

As a senior manager at Wise Assets UK Ltd, the FCA expected Mr Käärmann to have self-notified of any matters that may be significant to his fitness and propriety, which included matters that may have an adverse impact on his reputation and/or that of his firms.

Mr Käärmann would have been fined £500,000 but agreed to resolve the matters and qualified for a 30% discount.