February 16, 2007
I oppose 33-8766.
One, it violates the individual and property rights of individuals to associate with one another. Who is the SEC to limit the amount of the amount of money I choose to place with a hedge fund advisor? That amount is a private transaction between the hedge fund advisor and me.
Two, the raising of the minimum works in favor of large established hedge funds and makes it harder for new and small advisers to provide their services to individuals. The SEC is creating a cartel. The minimum should be reduced to zero.
Three, the idea that 33-8766 is necessary to enforce fraud makes no sense at all. I wonder if the fraud provision is simply an emotionalist attempt to garner support for the raising of the minimum. Fraud laws have been on the books for centuries. Is the SEC saying that there is currently no recourse for an investor who has been defrauded by a hedge fund advisor? I don't think the SEC is plugging any fraud holes here. It looks like the SEC is not attempting to increase justice. It looks like it is attempting to increase its power and control.