Wise boss fined £350,000 over failure to report ‘significant tax issue’

The boss of London-listed money transfer firm Wise has been fined £350,000 by the UK financial watchdog for failing to notify it about “significant tax issues”.

The Financial Conduct Authority (FCA) said Kristo Kaarmann, who co-founded the business in 2011,  failed to initially notify the regulator about a previous tax issue and fine during an assessment of his fitness and propriety in 2021.

The chief executive was previously fined £365,651 by HMRC relating to an outstanding capital gains tax bill for the 2017-18 tax year.

“Mr Kaarmann failed to appropriately consider the significance of the tax issues and notify the FCA, despite being aware of them for over 7 months,” the FCA said.

Mr Kaarmann’s fresh fine was reduced from a potential £500,000 after agreeing to resolve the matter.

Therese Chambers, joint executive director of enforcement and oversight at the FCA, 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 Kaarmann that he needed to tell us about these issues which were highly relevant to our assessment of his fitness and propriety.”

Wise, which was listed in the London Stock Exchange in 2021, stressed that the FCA did not report any issues with “Kristo’s continued fitness and propriety to perform his current roles at Wise”.

David Wells, chairman of Wise, said: “Following the inclusion of Kristo’s name on HMRC’s list in September 2021, the board conducted its own investigation and assessed that Kristo remained fit and proper to continue in his roles at Wise.

“The board also required him to take remedial actions to ensure that his personal tax affairs are appropriately managed and is satisfied that these actions were taken.

“We’re pleased that the FCA’s conclusions are consistent with Wise’s own assessment in 2021, and that the matter is now closed in its entirety.”

Mr Kaarmann said: “After several years and full co-operation with the FCA, we have brought this process to a close.

“I remain focused on delivering the mission for Wise and achieving our long-term vision for being ‘the’ network for the world’s money.

“We continue to build a product and a company that will serve our customers and owners for the decades to come.”