Subject: File No. S7-07-12
From: Mary K Trail
Affiliation: Retired College Instructor

September 2, 2012


Hasn't the middle class already lost enough to Wall Street? Don't make it easier for hedge funds to take money from novice investors.

As David Swensen, the chief investment officer of the Yale Endowment, once said said: "Thievery, even when dressed in the cloak of SEC-approved governance, remains thievery... as the powerful financial services industry exploits vulnerable individual investors."

"It's a very dangerous precedent for the SEC to have launched into this, said industry observer Geoff Bobroff, a consultant based in Rhode Island. Theres a reason why these products are for high-net-worth and accredited investors you can lose money and a lot of it if things go wrong. Personally, I dont think John Q. Public should be exposed to it."

"Yet established funds may not feel compelled to advertise, said Bartlett Naylor, financial policy advocate in Public Citizens Congress Watch Division. More likely, he added, the advertisers will be a mix of the mediocre, the frauds and the new funds, all of them willing to take money from people who may meet the standard for accreditation but who arent sophisticated investors."

"Naylor expects that private-equity firms needing to advertise will lack the track record to attract money in traditional ways, which should raise a red flag."

"We're concerned with the person who may have enough money or income, but theyre not sophisticated, Naylor said. If you dont know how to find a hedge fund on your own if you wouldnt have heard of the one you are interested in buying someday without the ad trying to sell you on it I think that renders you an unsophisticated investor. At that point, you should walk away. Youre not qualified, no matter what the SEC thinks about you."

Excepts from "Hedge fund advertising is a wild pitch" by Chuck Jaffe
9/2/12