ASIC bans investment services director

The Australian Securities and Investments Commission (ASIC) has disqualified former Magnolia Capital director, Mitchell Atkins, after deceptive and misleading conduct was discovered.

Banned from managing corporations for five years and from providing financial services and engaging in credit activities for 10 years, Atkins was a director of Magnolia Capital Group at the time of its collapse in 2022 when it owed unsecured creditors millions of dollars.

Atkins was also an authorised representative of Australian financial services licensee (AFSL) Guildfords Funds Management from 2018 to 2022. An ASIC investigation found during this time, Atkins:

• “dealt 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; and
• failed to undertake training, deal with investor complaints and to respond to requests from Guildfords.”

Also as director of the Magnolia Capital group of companies that provided investors with financial advice and other services regarding secured lending transactions and share investment between 2018 and 2022, ASIC found 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.”

Thirteen companies of which Atkins was a director of had a liquidator’s report lodged with ASIC that indicated the companies were unable to pay their unsecured creditors more than half of what the $40-$50 million owed.

ASIC said Atkins can review its decision at the Administrative Appeals Tribunal, and his disqualifications have been recorded on the corporate regulator’s banned and disqualified register.

The ban follows Atkins’ declaration of bankruptcy in early 2023.