Mitchell Atkins will be barred from managing corporations for five years and from working in financial services for 10 years,amid a probe by the Australian Securities and Investments Commission (ASIC) into his business activities.
Mitchell Atkins’ Magnolia Group offered investment in a fund holding a $30 million Lamborghini Essenza SCV12.Supplied
This masthead into Atkins’ Magnolia Group of businesses earlier this year and the regulator’s dramatic airport intervention to stop the 31-year-old money manager from leaving the country with his young family to visit an unwell relative.
Atkins’ business empire collapsed in 2022 following allegations he had mismanaged client funds. At the time,Atkins claimed his business problems were the result of unscrupulous share brokers. However,as this masthead revealed,there were also serious doubts about those claims,with Atkins confirming that some of the Magnolia money had been lost on complex financial derivatives that are akin to gambling products.
Creditors are thought to be owed at least $50 million,though the extent of losses and assets is undetermined,with the extent of Magnolia’s business dealings still unclear to liquidators of the group’s various businesses.
Magnolia counted some of Australia’s richest families as its clients,including the family of the late Melbourne business magnate and philanthropist,Victor Smorgon,as well as successful entrepreneurs,barristers and private investors with self-managed superannuation funds.
The group claimed to operate the best-performing share fund in the country. Its main operation was a private lending business that helped arrange loans for borrowers looking to complete property developments or buy more exotic items,such as a $1.2 million Ferrari,and offered investment in a fund holding a $30 million Lamborghini Essenza SCV12.
Atkins was licensed to provide financial advice through an arrangement with the Sydney financial services group Guildford Funds Management.
In a statement on Wednesday,ASIC said it had investigated Atkins’ role as an authorised financial representative as part of its decision to ban him from managing companies and working in financial services.
“ASIC’s findings included that Mr Atkins failed to act in good faith as a director by putting investor funds at risk,showed a lack of honesty and integrity by creating false documents,co-mingling investor funds and displayed a lack of competence,professionalism and financial management such that it is in the public interest that he be disqualified from managing corporations.”
ASIC found that Atkins “is not a fit and proper person to provide financial services due to him dealing in financial products without authorisation from Guildfords,making misleading and deceptive representations to investors about their investments and dishonestly retaining investor funds which were due to be repaid to investors”.
The regulator also said that Atkins was not a fit and proper person to engage in credit activities because he failed to undertake training and did not deal with investor complaints or respond to requests from Guildfords.
It added that its investigation into Atkins and Magnolia was continuing.
Atkins,who remains an undischarged bankrupt,will have the right to appeal the banning order to the Administrative Appeals Tribunal.
In a statement issued via his public relations representative,Atkins said:“Given the Magnolia Capital Group has collapsed into insolvency and liquidation,I accept that a banning order is a common outcome in those situations. However,I maintain that I always acted in good faith for the benefit of my investors and stakeholders and reject any suggestions to the contrary.”
“As the investigations of ASIC and the liquidators of the Magnolia Capital Group remain ongoing,I cannot make any substantive comment at this time and look forward to having an opportunity,in due course to correct the record and tell the full story.”
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