A top official for the Financial Industry Regulatory Authority resigned after the agency was informed he was indicted for felony theft and charitable bingo fraud in 1993, the year he joined the agency.
Mitchell C. Atkins, a senior vice president who managed Finra’s work in 11 states, quit after spending 20 years with the brokerage industry self-regulator and its predecessor. A Wisconsin broker who was the target of enforcement actions overseen by Atkins wrote Finra about the indictment on May 21.
Nancy Condon, a Finra spokeswoman, confirmed that Atkins, 42, resigned. She declined to answer other questions, including when he resigned and whether the regulator knew about his indictment before he was hired. Atkins did not return a phone message seeking comment.
Atkins joined the National Association of Securities Dealers, Finra’s predecessor, in 1993, according to a statement released when he took over the organization’s Florida office. He oversaw a staff of 160 people regulating 850 brokerages, according to his Finra biography.
David Evansen, a Wisconsin-based broker who is appealing a Finra decision to bar him from the industry, said Atkins’ past probably would disqualify him from working in the brokerage industry.
“It is well-established that the theft of funds, in any context, results in an absolute bar to the privilege of working at any member of Finra,” Evansen wrote to Finra Chief Executive Officer Richard Ketchum and Executive Vice President Susan Axelrod on May 21.
Atkins and his father, Wilbur D. Atkins Jr., were indicted and charged with felony theft and charitable bingo fraud in March 1993 for misusing the proceeds of bingo games, according to a copy of the indictment obtained from the Supreme Court of Louisiana. Atkins’ father was stripped of his law license over his role in the matter, according to the Louisiana Attorney Disciplinary Board.
An investigation by the Louisiana State Police found a health-care corporation formed by Atkins’ father reaped more than $58,000 in bingo proceeds in 1991 and 1992, and that “no money was received by any charitable organization,” according to the disciplinary board’s summary of the probe. The company had more than $1 million in debt at the time and hadn’t done any business since 1988, the board’s record states.
Holders of charitable gaming licenses can be prosecuted if they use gaming proceeds for reasons other than “educational, charitable, patriotic, religious or public-spirited purposes,” Michael Legendre, director of the Louisiana Office of Charitable Gaming, said in a telephone interview. Legendre wasn’t involved in the Atkins investigation.
Atkins conceived the idea for holding bingo games and leased a facility to hold them, according to the disciplinary board’s record. More than $54,000 in proceeds were “funneled” from the health-care company, which had a license to conduct bingo, to a corporation operated by Atkins, according to the record, which cites a Louisiana prosecutor’s statement.
In November 1993 Atkins agreed to plead guilty to charitable bingo fraud, a misdemeanor, and prosecutors dropped the felony theft charge, according to minutes of court proceedings from Louisiana’s East Baton Rouge Parish. The conviction was “set aside” after Atkins showed that he carried out the terms of his sentence, including 100 hours of community service and a $500 payment to the United Way, according to the minutes.
Atkins’ father also pleaded guilty to charitable bingo fraud. In moving to disbar Atkins’ father, a hearing committee of the disciplinary board found he helped Mitch Atkins “commit a criminal act.” The father violated his public duty by knowingly misusing two companies “to divert funds from any charitable or benevolent purpose,” the committee wrote.
Evansen said he looked into Atkins’ past after he decided Atkins and his staff weren’t considering his communications about an enforcement case against him. Finra banned Evansen from the industry in 2011 after it said he failed to provide information related to a customer’s claims of unsuitable investment recommendations, unauthorized trades and excessive trading, according to a record available on Finra’s website.
Evansen contends that the discipline was retaliation for a whistle-blower complaint he made about a large brokerage and clearing firm. Evansen was based in South Florida at the time.