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Australia's corporate watchdog has banned former Magnolia Capital Group director and founder Mitchell Atkins from managing corporations, alleging he failed to act in good faith as a director by putting investor funds at risk and showed a lack of honesty and integrity by creating false documents.
Atkins was declared bankrupt in March 2023 and had been a director of all entities in Magnolia's extensive group of companies until they hit the wall in 2022, owing millions of dollars to unsecured creditors.
"All of a sudden these margin lenders are saying they don’t want to deal with us anymore so our portfolios are getting liquidated," Atkins said previously of the ordeal, having built the portfolio with a focus on algorithmic trading with leveraging to help pay for trades as the funds grew.
Liquidators have reported a deficiency to creditors of $40-50 million, with 13 companies in the group unable to pay their unsecured creditors more than 50 cents in the dollar.
It is also understood that prior to the collapse Atkins had a falling out with Melbourne businessman David Koadlow over a jointly-owned investment fund.
Atkins, a Central Coast native, is alleged by the Australian Securities and Investments Commission (ASIC) to have co-mingled investor funds, displaying a 'lack of competence, professionalism and financial management such that it is in the public interest that he be disqualified from managing corporations'.
ASIC has also banned him from providing financial services or engaging in credit activities for 10 years.
The young investment manager was also an authorised representative of Australian financial services licensee Guildfords Fund Management between 19 September 2018 and 7 October 2022
The watchdog, which is still investigating the affairs of the Magnolia Capital Group, also also alleges 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'.
ASIC alleges Atkins 'is not a fit and proper person to engage in credit activities, including because he failed to undertake training, deal with investor complaints and to respond to requests from Guildfords'.
Business News Australia has reached out to Atkins for comment on ASIC's findings, but is yet to receive a response at the time of publication.
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