Subject: File No. S7-25-06
From: Aaron L. Smith

February 23, 2007

To Whom It May Concern:

I am troubled to read that the Commission is considering an increase in the financial suitability requirements necessary to qualify as an accredited investor and thereby to access private placements, commonly known as hedge funds. This is contrary to the free market ideals that I hold dear as an American investor.

Hedge funds certainly involve risks. So do options, futures, margined position on stocks, etc. Such a measure would severely limit diversification opportunity and I believe the US must embrace hedge fund investing if we are to remain competitive in the global markets. There is tremendous opportunity for diversification just within the hedge fund industry; some strategies are much more conservative than so called traditional investments.

Frankly, it bothers me that hedge funds have no way to publicly register or offer their products. I think many managers would welcome the opportunity to legitimize their investment strategies by registering with the requisite authorities. But no framework exists. I think this would be more important to focus on, rather than excluding sophisticated retail investors who aren't rich enough to understand a prospectus.

Do you really think hedge funds are more risky than any other investment, like mutual funds that I lost more than 80% of the value of my investment in recent years? What about my Enron stock? There is risk in any investment, but the only big hedge fund blow ups I can think of are LTCM and Amaranth. Compare that with hundreds of public companies that have gone bankrupt in just the past few years.

Whatever happened to laissez faire? I hope that we can return to the ideals that made this country great.

Respectfully submitted,

Aaron L. Smith