Invezz.com - UK’s financial regulator announced a £350,000 ($454,224) penalty on Kristo Käärmann – the billionaire chief executive of Wise PLC (LON:WISEa) (LON: WISE) on Monday. Shares of the financial technology company are in the red at writing.
Käärmann sold some £10 million worth of shares but failed to clear the related tax liability in 2017.
The Financial Conduct Authority, therefore, found the CEO in breach of the Rule 4 of its Senior Management Conduct.
Wise stock is down more than 25% versus its year-to-date high at writing.
Käärmann has had issues with tax filings before
The Rule 4 of FCA’s Senior Management Conduct expects top executives to appropriately disclose “any information of which the FCA would reasonably expect notice.”
Today wasn’t the first time that Kristo Käärmann of Wise PLC was fined for an issue related to his tax filings.
He was late in submitting his tax returns for 2017-18 for which Her Majesty’s Revenue and Customs ordered him to pay £365,651 penalty in 2021.
Tax liability of the chief executive for that year was £720,495, as per the HMRC.
The tax collection agency also added Käärmann to its list of public tax defaulters at the time.
The FCA expects higher standards from leaders of financials firms, said Therese Chambers, the agency’s joint executive director of enforcement and oversight.
“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,” she added.
Is Wise stock worth buying in October?
Kristo Käärmann remains fully committed to achieving the long-term vision of Wise PLC.
Responding to the penalty the Financial Conduct Authority of the United Kingdom announced this morning, he said:
After several years and full cooperation with the FCA, we have brought this process to a close.We continue to build a product and a company that will serve our customers and owners for the decades to come.
David Wells – chair of the global money transfer company also reiterated today that Wise takes its regulatory obligations very seriously.
Wise stock has been in a sharp downtrend over the past six months but Wall Street remains convinced that a recovery is in sight.
Analysts currently rates the fintech at “overweight” and see upside in its share price to £9.50 on average that indicates potential for about a 30% upside from here.
But shares of the London-headquartered firm remain unattractive for income investors as they do not currently pay a dividend.