Finance

Wise’s billionaire CEO fined £350,000 by regulators over tax issue

Published

4 months ago

October 28, 2024

Business Finance News

Kristo Kaarmann, CEO and co-founder of Wise.

Eoin Noonan | Sportsfile | Getty Images

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.”

It comes after the Wise boss was hit with a separate £365,651 fine by U.K. tax collection agency Her Majesty’s Revenue and Customs (HMRC) in 2021 for being late to submitting his tax returns during the 2017/18 tax year.

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.

Finance

Anthropic closes in on $3.5 billion funding round

Published

22 minutes ago

February 24, 2025

Business Finance News

Dario Amodei, Anthropic CEO, speaking on CNBC’s Squawk Box outside the World Economic Forum in Davos, Switzerland on Jan. 21st, 2025.

Gerry Miller | CNBC

Anthropic is in talks to raise a $3.5 billion funding round, significantly more than the amount previously expected, CNBC has confirmed.

The round would roughly triple the artificial intelligence startup’s valuation to $61.5 billion, according to two sources familiar with the deal, who asked not to be named because the details aren’t public. Lightspeed Ventures is leading the funding, with participation from General Catalyst and others, the sources said.

The financing, which was first reported by the Wall Street Journal, signals continued investor demand for top-tier AI companies, even in the face of potential disruption from China’s DeepSeek. Anthropic is backed by Amazon and Google, and had initially set out to raise $2 billion, according to a source.

Anthropic declined to comment.

The company’s last private market valuation was $18 billion. Amazon has poured $8 billion into the startup.

Anthropic was founded by early OpenAI employees and is the creator of the popular chatbot Claude. Earlier Monday, Anthropic released what it says is it’s “most intelligent AI model yet. Its so-called hybrid model combines an ability to reason — or stopping to think about complex answers — with a traditional model that spits out answers in real time.

WATCH: Anthropic unveils newest AI model

Amazon-backed Anthropic unveils newest AI-model

Finance

Jamie Dimon calls U.S. government ‘inefficient,’ touts Elon Musk’s DOGE effort

Published

2 hours ago

February 24, 2025

Business Finance News

Watch CNBC's full interview with JPMorgan CEO Jamie Dimon

JPMorgan Chase CEO Jamie Dimon on Monday said the U.S. government is inefficient and in need of work as the Trump administration terminates thousands of federal employees and works to dismantle agencies including the Consumer Financial Protection Bureau.

Dimon was asked by CNBC’s Leslie Picker whether he supported efforts by Elon Musk’s Department of Government Efficiency. He declined to give what he called a “binary” response, but made comments that supported the overall effort.

“The government is inefficient, not very competent, and needs a lot of work,” Dimon told Picker. “It’s not just waste and fraud, its outcomes.”

The Trump administration’s effort to rein in spending and scrutinize federal agencies “needs to be done,” Dimon added.

“Why are we spending the money on these things? Are we getting what we deserve? What should we change?” Dimon said. “It’s not just about the deficit, its about building the right policies and procedures and the government we deserve.”

Dimon said if DOGE overreaches with its cost-cutting efforts or engages in activity that’s not legal, “the courts will stop it.”

“I’m hoping it’s quite successful,” he said.

In the wide-ranging interview, Dimon also addressed his company’s push to have most workers in office five days a week, as well as his views on the Ukraine conflict, tariffs and the U.S. consumer.