LONDON — Kristo Käärmann, the billionaire CEO of money transfer firm Wise, was slapped with a £350,000 ($454 million) fine by financial regulators in the U.K for failing to report an issue with his tax filings.
Käärmann, who co-founded Wise in 2011 with fellow entrepreneur Taavet Hinrikus, was on Monday ordered by the Financial Conduct Authority (FCA) to pay the sizable penalty due to a breach of the watchdog’s senior manager conduct rule.
The FCA said that Käärmann failed to notify the regulator about him not paying a capital gains tax liability when he cashed in on shares worth £10 million in 2017.
The watchdog found him in breach of its Senior Management Conduct Rule 4, which states: “You must disclose appropriately any information of which the FCA would reasonably expect notice.”
Käärmann’s name was added to HMRC’s public tax defaulters list. His tax liability for that year was £720,495, according to HMRC.
‘High standards’ expected
The FCA said Monday that, between February 2021 and September 2021, the tax issues were relevant to its assessment of Käärmann’s fitness and propriety as a senior director of a financial services firm.
Käärmann failed to consider the significance of the issues and notify the FCA despite being aware of them for over seven months, the regulator added.
“We, and the public, expect high standards from leaders of financial firms, including being frank and open,” Therese Chambers, joint executive director of enforcement and oversight, said in a statement Monday.
“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.”
Käärmann said in a statement Monday that he remains “focused on delivering the mission for Wise and achieving our long-term vision.” “After several years and full cooperation with the FCA, we have brought this process to a close,” he said.
“We continue to build a product and a company that will serve our customers and owners for the decades to come,” Käärmann added.
The chair of Wise, David Wells, said that the company’s board of directors “continues to take Wise’s regulatory obligations very seriously.”
Wise’s board found that Käärmann was “fit and proper” to continue in his role at the firm after an internal investigation in 2021.
As a result of that review, Käärmann was required by the board to take “remedial actions” to ensure his personal tax affairs were appropriately managed.
Less severe than feared
The value of the FCA’s fine is substantially lower than the potential maximum fine he could have faced.
Käärmann could have been fined as much as £500,000 for his tax failings, but qualified for a 30% discount because he agreed to resolve the issues.
News of the fine comes after Wise earlier this month reported a 17% increase in “underlying income,” which consists of cross-border revenue, card and other revenue, and interest income.
Wise reiterated its target of achieving an underlying profit before tax margin of 13% to 16% over the medium term thanks to investments in pricing, and added that meant it wouldn’t have to make “further material investments in reduced pricing” in the second half of the year.
In a note Monday, analysts at British investment bank Peel Hunt boosted their expectations for Wise’s full-year profit before tax by 15%. They have a £1,000 price target and a “buy” rating on the stock.
“While Wise made no changes to the guidance set in June 2024, we expect a significant near-term beat,” Peel Hunt analysts Gautam Pillai and Barun Singh wrote in the note.
Käärmann and Hinrikus, both Estonian tech entrepreneurs who immigrated to the U.K., took Wise from a scrappy startup to a payments disruptor now worth £7.4 billion.
They created Wise to offer a low-cost alternative to banks charging hidden fees for moving money across borders.
Warren Buffett went on the record Friday to deny social media posts after President Donald Trump shared on Truth Social a fan video that claimed the president is tanking the stock market on purpose with the endorsement of the legendary investor.
Trump on Friday shared an outlandish social media video that defends his recent policy decisions by arguing he is deliberately taking down the market as a strategic play to force lower interest and mortgage rates.
“Trump is crashing the stock market by 20% this month, but he’s doing it on purpose,” alleged the video, which Trump posted on his Truth Social account.
The video’s narrator then falsely states, “And this is why Warren Buffett just said, ‘Trump is making the best economic moves he’s seen in over 50 years.'”
The president shared a link to an X post from the account @AmericaPapaBear, a self-described “Trumper to the end.” The X post itself appears to be a repost of a weeks-old TikTok video from user @wnnsa11. The video has been shared more than 2,000 times on Truth Social and nearly 10,000 times on X.
Buffett, 94, didn’t single out any specific posts, but his conglomerate Berkshire Hathaway outright rejected all comments claimed to be made by him.
“There are reports currently circulating on social media (including Twitter, Facebook and Tik Tok) regarding comments allegedly made by Warren E. Buffett. All such reports are false,” the company said in a statement Friday.
CNBC’s Becky Quick spoke to Buffett Friday about this statement and he said he wanted to knock down misinformation in an age where false rumors can be blasted around instantaneously. Buffett told Quick that he won’t make any commentary related to the markets, the economy or tariffs between now and Berkshire’s annual meeting on May 3.
‘A tax on goods’
While Buffett hasn’t spoken about this week’s imposition of sweeping tariffs from the Trump administration, his view on such things has pretty much always been negative. Just in March, the Berkshire CEO and chairman called tariffs “an act of war, to some degree.”
“Over time, they are a tax on goods. I mean, the tooth fairy doesn’t pay ’em!” Buffett said in the news interview with a laugh. “And then what? You always have to ask that question in economics. You always say, ‘And then what?'”
During Trump’s first term, Buffett opined at length in 2018 and 2019 about the trade conflicts that erupted, warning that the Republican’s aggressive moves could cause negative consequences globally.
“If we actually have a trade war, it will be bad for the whole world … everything intersects in the world,” Buffett said in a CNBC interview in 2019. “A world that adjusts to something very close to free trade … more people will live better than in a world with significant tariffs and shifting tariffs over time.”
Buffett has been in a defensive mode over the past year as he rapidly dumped stocks and raised a record amount of cash exceeding $300 billion. His conglomerate has a big U.S. focus and has large businesses in insurance, railroads, manufacturing, energy and retail.
Check out the companies making headlines in midday trading: Bank stocks — Major banks declined on Friday, as President Donald Trump’s new tariff policies increasingly raised fears of a U.S. economic pullback. Shares of Goldman Sachs , Citigroup , Morgan Stanley and Wells Fargo tumbled about 8%. JPMorgan dropped 7%. Tesla , Palantir Technologies — Top picks among retail investors were not able to buck Friday’s sell-off. Electric vehicle maker Tesla dropped around 10%, while defense technology stock Palantir tumbled 12%. Property stocks — Real estate stocks Prologis and Simon Property Group each slipped about 3% on Friday. Property stocks are sensitive to consumers’ discretionary spending levels. Apple — Shares of the iPhone maker slid more than 5% on China’s retaliatory duties against the U.S. China makes up for about 80% of Apple’s production capacity with about 90% of iPhones assembled in the country, according to Evercore ISI estimates. China funds — China-focused exchange-traded funds fell after the country’s finance ministry announced a 34% tariff on U.S. imports beginning April 10, in response to the Trump administration’s cumulative 54% duty on Chinese goods. The KraneShares CSI China Internet ETF (KWEB) declined more than 9%, while the iShares MSCI China ETF (MCHI) and the iShares China Large-Cap ETF (FXI) dropped 7% each. Chipmakers — Semiconductor stocks with notable exposure to China slipped. Shares of Marvell Technology fell about 12%, while Intel lost 10%. Nvidia and Broadcom shares each declined more than 7%. Manufacturing stocks — Shares of farm and construction equipment manufacturers declined amid the latest tariff updates. Deere and CNH Industrial dropped 4% and 6%, respectively, while Caterpillar and AGCO tumbled more than 5%. UBS analyst Steven Fisher said in a note to clients that “the trade dynamics are a headwind to the ag sector and to farm machinery companies, as farmers tend to prefer free trade, rather than rely on government payments.” Boeing , GE Aerospace — Boeing slid more than 9%, and GE Aerospace dropped more than 8%. Trump’s raft of tariffs threaten to drive the cost of aircraft, engines and other aerospace products higher. Shell — Shares of the London-based energy company slid more than 8% after Trump’s tariffs led U.S. oil prices to drop to their lowest level since 2021 this week. Casino stocks — Casino operators in Macao declined on Friday. Shares of Las Vegas Sands slipped about 8%, while Wynn Resorts and MGM Resorts International each declined about 4%. — CNBC’s Alex Harring, Sean Conlon, Lisa Han and Hakyung Kim contributed reporting.
US Federal Reserve Chair Jerome Powell holds a press conference after the Monetary Policy Committee meeting, at the Federal Reserve in Washington, DC on March 19, 2025.
Roberto Schmidt | Afp | Getty Images
Federal Reserve Chair Jerome Powell said Friday that he expects President Donald Trump’s tariffs to raise inflation and lower growth, and indicated that the central bank won’t move on interest rates until it gets a clearer picture on the ultimate impacts.
In a speech delivered before business journalists in Arlington, Va., Powell said the Fed faces a “highly uncertain outlook” because of the new reciprocal levies the president announced Wednesday.
Though he said the economy currently looks strong, he stressed the threat that tariffs pose and indicated that the Fed will be focused on keeping inflation in check.
“Our obligation is to keep longer-term inflation expectations well anchored and to make certain that a one-time increase in the price level does not become an ongoing inflation problem,” Powell said in prepared remarks. “We are well positioned to wait for greater clarity before considering any adjustments to our policy stance. It is too soon to say what will be the appropriate path for monetary policy.”
The remarks came shortly after Trump called on Powell to “stop playing politics” and cut interest rates because inflation is down.
There’s been a torrent of selling on Wall Street following the Trump announcement of 10% across-the-board tariffs, along with a menu of reciprocal charges that are much higher for many key trading partners.
Powell noted that the announced tariffs were “significantly larger than expected.”
“The same is likely to be true of the economic effects, which will include higher inflation and slower growth,” he said. “The size and duration of these effects remain uncertain.”
Focused on inflation
While Powell was circumspect about how the Fed will react to the changes, markets are pricing in an aggressive set of interest rate cuts starting in June, with a rising likelihood that the central bank will slice at least a full percentage point off its key borrowing rate by the end of the year, according to CME Group data.
However, the Fed is charged with keeping inflation anchored with full employment.
Powell stressed that meeting the inflation side of its mandate will require keeping inflation expectations in check, something that might not be easy to do with Trump lobbing tariffs at U.S. trading partners, some of whom already have announced retaliatory measures.
A greater focus on inflation also would be likely to deter the Fed from easing policy until it assesses what longer-term impact tariffs will have on prices. Typically, policymakers view tariffs as just a temporary rise in prices and not a fundamental inflation driver, but the broad nature of Trump’s move could change that perspective.
“While tariffs are highly likely to generate at least a temporary rise in inflation, it is also possible that the effects could be more persistent,” Powell said. “Avoiding that outcome would depend on keeping longer-term inflation expectations well anchored, on the size of the effects, and on how long it takes for them to pass through fully to prices.”
Core inflation ran at a 2.8% annual rate in February, part of a general moderating pattern that is nonetheless still well above the Fed’s 2% target.
In spite of the elevated anxiety over tariffs, Powell said the economy for now “is still in a good place,” with a solid labor market. However, he mentioned recent consumer surveys showing rising concerns about inflation and dimming expectations for future growth, pointing out that longer-term inflation expectations are still in line with the Fed’s objectives.
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