What can we learn from Apple, Groupon, and Facebook? That it pays more than a billion dollars to be the first team off the starting block. They have been rewarded with billion dollar IPOs by successfully predicting market behavior. Three years ago, WealthForge began developing their own prediction model focused on the idea that “crowdfund investing” would be legalized in the U.S. and only moments ago, their prediction came true.

President Obama just signed the JOBS act into law, signifying new legislation that will lift several SEC restrictions on soliciting investors, while permitting “crowdfunding” the ability for entrepreneurs to raise equity capital from larger groups of small investors.

Investments must be made through an SEC registered “funding portal” or website and investors may be limited in their total crowdfunding investments based on their net worth. (For detailed JOBS act information) click here.

Mat Dellorso and Fred Bryant co-founders of WealthForge are glad to see this day come, but neither are surprised about the overwhelming approval of the JOBS act. The two former University of Richmondstudents founded WealthForge in 2009 with the idea that smaller businesses should have greater chances of raising capital.

“Being a startup ourselves, we experienced the challenges of fundraising,” says Dellorso. “Our goal was to create a more efficient and simplified marketplace where entrepreneurs and investors could locate funding opportunities and complete the fundraising transactions in one place.”

It took almost 3 years for WealthForge to prove the model and register with the SEC. However, it appears their due diligence has paid off. While the JOBS act awaits the SEC’s 270 day review period, WealthForge stands ready to handle “crowdfund investing” NOW.

At WealthForge, entrepreneurs create a business profile and outline their funding objectives in a secure environment. Once the business is ready to fundraise they can use the platform to expose their business and funding objectives with a community of potential investors. This isn’t your typical Kickstarter project where entrepreneurs seek donations, rather where entrepreneurs raise equity capital for their business.

“WealthForge vets company profiles for strong investment opportunities,” Dellorso remarks, “we also vet investors to ensure they are a good fit for the company who is seeking capital and guidance.”

A new marketplace for small business fundraising has emerged and WealthForge is armed and ready. Create your profile at http://wealthforgeonline.com.

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More than three years after the financial crisis, Wall Street watchdogs are still uncovering questionable actions rooted in that time. The latest revelation involves one of the more creative packagers of securities who contributed to a trail of billions in soured deals, as well as a much-maligned rating agency.

The Financial Industry Regulatory Authority — an independent, non-governmental regulatory body — has recommended disciplinary action against two men for “alleged misrepresentations in connection with the sale” of a complex security.

The recommendation is preliminary. No civil or criminal charges have been filed. The men, Alexander Rekeda and Timothy Day, are both affiliated with Guggenheim Capital, a privately held, financial services company that does everything from trading securities to providing investment advice. According to its web site, the firm, headquartered in New York, has 1,700 employees in 25 offices located in 10 countries, and it manages about $125 billion.

A lawyer for Rekeda could not be reached for comment. ProPublica has learned that he is no longer with Guggenheim. Day, who is still at Guggenheim, did not respond to a request for comment. We will update this post when they are reached.

FINRA has been investigating the men over the sale of a type of security known as a collateralized loan obligation, or CLO. The investigation touches on a CLO called Nine Grade Funding II, although it remains unclear if this CLO is the main focus of the probe. FINRA’s filing did not elaborate on the type or character of the “alleged misrepresentations” it said were involved in the sale of the CLO it is investigating.

In a story published Monday evening, the Wall Street Journal reported that Rekeda was under investigation by FINRA for an unnamed CLO. The Journal also reported that Rekeda is being investigated by the Securities and Exchange Commission for a collateralized debt obligation, or CDO, he helped construct while employed by the Japanese bank Mizuho.

As Propublica detailed in the series the Wall Street Money Machine, Rekeda was involved in the creation of several CDOs with Magnetar, a hedge fund that helped put together more than $40 billion of the securities. Magnetar often lobbied for riskier assets to be put into the CDOs and then placed bets against many of the investments, reaping tremendous profits when the deals soured. (Magnetar has never been charged with any wrongdoing, and has always maintained that it did not have a strategy to bet against the housing market.)

The investigation into Rekeda is one of the few public signs that regulators are considering charges against a top banking executive involved in a Magnetar deal. Nine Grade Funding was a CLO comprised of other CLOs backed by corporate loans. It was issued at a time when few such securities were being sold.

The CLO was featured prominently in allegations by a whistleblower, Eric Kolchinsky, against the rating agency Moody’s. Kolchinsky alleged that Moody’s allowed bonds to be added to the CLO in January 2009 and that it allowed the CLO to keep its previous rating.

Moody’s took these actions, according to Kolchinsky, despite plans already in the works by the rating agency to downgrade all such securities. Moody’s denied the allegations. After Kolchinsky was forced out of the firm, he testified about the deal before the House Committee on Oversight and Government Reform.

by Jake Bernstein, ProPublica, Feb. 21, 2012, 6:59 p.m.

Image Courtesy of  Songquan Deng / Shutterstock.com

The article Two Wall Street Players Ensnared in New Probe appeared first on The Toonari Post - News, Powered by the People!.