Subject: File No. S7-25-06
From: Kane Cotton

January 29, 2007

RE: File Number S7-25-06

I do not believe a $2.5 million minimum liquid net worth is a proper way to protect investors from the risks of hedge funds or private placements.

Rather, a maximum percentage of liquid net worth would be more appropriate.

Another option would be to create something similar to the 1940 Investment Company Act for Hedge Funds.

Using only a net worth based approach is classist. Further, it will do nothing to mitigate the risks of hedge funds. It will just mean that rich people can make or lose more money.

Please reconsider your stance.
Kane S. Cotton.