From: Bob Goldbaum
Sent: February 2, 2007
Subject: File No. S7-25-06

Regarding proposed changes to the minimum net worth requirements for accredited investors:

I've been involved with Private investments for approximately 15 years: from accounting, running operations of a $4bil investment firm (hedge funds, mutual funds, PE and RE), starting a hedge fund advisory firm, and starting FundRunner (a technology solution to increase/automate shareholder reporting and compliance as well as being the first FULL system for HF due diligence used by many of the largest HFs and FoFs including DE Shaw, Morgan Stanley AIP, Frank Russell, Arden, Farallon, Elliott, Private Advisors, Golden Tree, etc.), helping get HedgeFund.Net off the ground, building CSFB's HF Index site and so on... and now being at a fund administrator (I know the biz.)

I appreciate the reasons for the orig. accredited investors rule and agree to a point with limits on marketing to the public such private investments. As you have probably been deluged by similar comments disagreeing with the proposed increase in minimum net worth, this apparent, knee jerk reaction to the Amaranth debacle seems to me entirely misplaced and frankly, unconstitutional. Most of Amaranths losses effected far fewer High Net Worth (HNW) Individuals, than it did supposedly sophisticated Institutional investors that are probably pushing this new proposal so they get more exclusive access, and thus control over such investment choices.

I can think of many things in the public financial marketplace that have just as much (if not more) risk than even lower quality hedge funds and labeling this rule as something to protect the lowly not-so-rich folks is insulting and blatantly discriminating. Why is it ok for middle America to squander their savings "investing" in the lottery or casino and not where the odds are that a return is more likely than a complete loss... especially if done through a Fund of Funds? Stop protecting the masses from themselves and focus on catching the crooks before they have a chance to pillage and preventing cash movements by those that support terrorists. Your job should be to try to figure out a way to open the doors to these types of investments with adequate controls, not to close them to those that need them the most.

I thought the advantages of locking up investors to reduce the effects of cash-flows on returns were about to hit main stream consciousness when the mutual fund scandals hit a few years ago, but in an instant seemed lost as did the major losses of long-only, over exposed and "diversified" mutual funds circa 2000-2001. More nimble, concentrated and/or hedged managers that focus on returns and not asset raising should be available to EVERYONE, period. Sad that the rest of the world is more free to do so than us living in the "Land of the Free" because writers of such rules desecrate this "Home of the Brave" with their cowardice by running from the challenge to explore what really would protect investors. PROTECT, not prevent!!!!

I would love to be a part of establishing the necessary controls to do this and know that raising accredited investor minimum's is simply detrimental window-dressing. Please feel free to call me as I would indeed like to help and feel my background in public and private investments and related operational and compliance issues suits this purpose.

Warm regards,
Bob Goldbaum
Spectrum Global Fund Administration
O: 312-602-5651
C: 312-927-8848
200 North LaSalle Street
Suite 2420
Chicago, IL 60601