From: R. L. Hays, Ph.D.
Sent: January 27, 2007
Subject: File No. S7-25-06

I am strongly opposed to raising the limits on "qualified investors." This is because: 1. I oppose increasing unfair advantages of the rich, whose greater investment resources give them better information and allow diversification at lower cost. 2. I oppose protecting existing managers of investment vehicles aimed at lower income people from competition by hedge funds and private placement investments. 3. I reject the claim that investing in shares is safe compared with hedge funds or private placements. In my own case, I was an investor for many years in a small company and knew it well (but only as an investor). I changed my number of shares as conditions changed. I had a chance to participate in a private placement (barely qualifying), and sold my shares to largely cover my stake. That investment has worked very well for me, and was only slightly more risky than my previous holding of shares. In fact, this one investment worked so well as to jump my portfolio enough to allow much greater diversification, lowering my risk. I now have a real alternative to relying on my employer's pension plan.

My son is at an age to begin investing. I abhor the idea that he will forever be hamstrung (if not precluded) from building enough capital to jump from investment poor to well-off because of the SEC's inflation adjustment tightening of the "qualified investor" limit. DO NOT DO THIS!

R. L. Hays, Ph.D.
Retired biologist