Wise CEO fined £350,000 for breach of senior manager conduct

Wise CEO Kristo Kaarmann has been fined £350,000 ($454,000) by the UK's Financial Conduct Authority (FCA) for failing to report an issue with his tax filings. Headquartered in London, Wise is a financial technology company focused on global money transfers.

The FCA imposed the penalty on October 28, stating that Kaarmann had breached a senior management conduct rule requiring timely disclosure of relevant information to regulators. The FCA revealed that Kaarmann neglected to inform the regulator about an unpaid capital gains tax liability after selling shares worth £10 million in 2017.

The fine follows a previous £365,651 penalty from the U.K.’s tax authority, HM Revenue and Customs (HMRC), in 2021 for late tax filings in the 2017/18 tax year. HMRC listed Kaarmann as a tax defaulter, noting a liability of £720,495 for that year. Despite the financial setbacks, Kaarmann maintains a reported net worth of $1.8 billion, according to Forbes.

In a statement, FCA's joint executive director of enforcement and oversight, Therese Chambers, emphasized that leaders of financial firms are expected to uphold high standards and be transparent.

The FCA said that Kaarmann's failure to report the tax issue between February and September 2021 raised concerns about his fitness to serve in a senior role within a financial services firm.

Kaarmann responded to the FCA’s findings, saying he is “focused on delivering the mission for Wise and achieving our long-term vision.” He noted that, after years of cooperating with the FCA, the matter has now been resolved.

David Wells, Chair of Wise, affirmed that the company’s board "continues to take Wise’s regulatory obligations very seriously." Following an internal investigation in 2021, the board concluded that Kristo Kaarmann remained "fit and proper" to continue as CEO.

As part of that review, the board mandated that Kaarmann undertake "remedial actions" to better manage his personal tax matters moving forward.