The UK Financial Conduct Authority (FCA) has fined Wise CEO Kristo Käärmann £350,000 for failing to promptly disclose a tax default, citing a breach of Senior Management Conduct Rule 4. He was fined 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.
Key Points:
- Fine Imposed: FCA fines Käärmann £350,000 for not reporting his tax default to the regulator.
- Background: Käärmann had been fined by HMRC in 2021 for not declaring a capital gains tax liability on a £10 million share sale from 2017.
- Regulatory Expectations: The FCA mandates prompt disclosures under Conduct Rule 4, which Käärmann breached by delaying his notification by seven months.
- Wise’s Response: Wise maintains confidence in Käärmann’s fitness for his role, confirming that he has taken required steps to manage his tax affairs.
Short Narrative:
The FCA has sanctioned Wise CEO Kristo Käärmann with a £350,000 fine for failing to disclose a significant tax default in a timely manner. HMRC had initially fined Käärmann for a £365,651 tax default, which resulted in his name being temporarily added to the public tax defaulters list. Despite this, he waited seven months before informing the FCA, violating Senior Management Conduct Rule 4. FCA officials underscored the importance of transparency from financial leaders, citing this case as a reminder of the expected integrity from executives.
Actionable Insight:
This incident highlights the strict regulatory standards in the UK concerning transparency and timely reporting from senior financial managers. Firms and executives must ensure thorough compliance with conduct rules to avoid significant penalties and reputational damage.
Call for Information:
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