Subject: File No. S7-25-06
From: Steven J Guillaudeu

January 27, 2007

Although I am a beginning, small investor mainly focused on stocks and mutual funds, I feel the proposed changes to the rule regarding a minimum net worth for access to hedge funds are unacceptable. Some day, I hope to have the level of sophistication to understand hedge funds and use them to further my net worth, but I do not feel that my net worth will determine that level of sophistication. It seems, in principle, that restricting access to hedge funds based on net worth is wholly unfair to most Americans. Net worth does not determine if someone is intellectually prepared to analyze the risks associated with dangerous sports, alcohol consumption, or even driving a car. Plenty of rich people have lost their fortunes through unsophisticated money management. If there is a requirement for investor sophistication to enable investing in hedge funds, it should be based on a test, much like driving a car. As it stands, risky investments are available to the public every day. I could start day trading, randomly picking stocks if I desire. There are no government protections against that, and there should not be. The government should require some warnings, such as disclaimers in prospectuses, but should not bar individuals from these investment vehicles.
For a well-versed description of options that I agree with, please see John Mauldin's latest newsletter release at
Thank you,
Steve Guillaudeu