Subject: File No. S7-25-06
From: Kevin J McCormick
Affiliation: Former Hedge Fund Manager/Partner WPG Credit Arbitrage Fund LLC

January 29, 2007

As a retired professional money manager who managed hedge funds from 1994-2005, I believe that the SEC's proposal to raise the minimum net worth requirement is the wrong way to address what is clearly a problem-the failure of many hedge funds to be providing a suitable investment for their clients.

I believe the more appropriate way to remedy this problem would be to institute a "suitability" standard that flowed two-ways. Both the hedge fund and the investor would be required to complete questionnaires and certify that they understood each other's goals, investment objectives and risks. Furthermore, the idea that somehow the concept of "net worth" equates to investor savvy is completely wrongheaded. I've met many multi-millionaires who's financial knowledge is very limited. On the other hand, I've met many savvy investors with limited financial resources. There are no per se net worth limitations on buying stock, and there should be no such limitations on investing in hedge funds. But hedge fund investors, and the funds themselves, should be held to the suitability standards that serve our financial markets so well.

Thank you for your consideration of my thoughts.


Kevin J. McCormick