Subject: File No. S7-25-06
From: Alan M Gordon
Affiliation: Personal Investor

January 31, 2007

Dear Sirs:

I consider myself a fairly sophisticated investor. Under current rules, I am considered an accredited investor.

I buy and sell stocks and mutual funds, options, understand and use covered calls, spreads, short stock positions, and on top of that, I study both technical and fundamental analysis. I also have invested in joint ventures and private placement partnerships, successfully, for gas and oil exploration.

Yet, under your new rules, I would no longer be considered an accredited investor. Your new rules would no longer allow me to participate in oil and gas investments, and therefore would take away a tax advantaged investment that would still be available to the wealthy investor.

I imagine your new rules are being proposed to place additional controls on hedge funds, but the definition of accredited investor pertains to Private Placement Memorandums, uses in the oil gas industry, and any changes would affect these investors too.

Under the proposed changes, I never would have been able to invest in any oil gas investments. Personally, I think that is unfair, since I am more 'sophosticated' of an investor than many of the wealthy people I know.

I question weather many of the brokers/advisors would actually be accredited under new rules, yet they are considered sophisticated enough to guide their accredited clients.

I believe that the fact that you have won a lottery or inherrited a great some of money does not make you a smart investor, and as such should not give you more status and investment choices than someone who studies the market and works with it every day.

I also know that some investments in Oil and Gas can be quite small, percentage wise, for example, if you do your due dilligence on an investment in a certain company I know, you can purchase a 1/2 unit investment for about $18,000. Such an investment is a very small percentage of the current $1,000,000 accreded investor net worth value. However, you do not stop anyone from dropping that same amount on a vacation, a bar mitzvah party, or other large waste of money for which you get no asset of value in return. So why stop someone from making an investment that could both better their future and also provide the government future tax revenue?

While I think it is a good idea that limiting investments by unsophisticated investors into certain risky investment classes that might allow them to get into trouble, I do not think that all investment should be disallowed.

Perhaps a laddered percentage-of-value of accreditation might be better. If you are worth $1 million, you can but in up to 10%. Up to $2 million, $15%. something along that line would allow everyone to invest, up to their protective limits, rather than stopping it altogether.

Due dilligence is more important to success than just having had the moeny to invest in the first place; many wealthy people lose money all the time by investing in ideas that they have not checked out.

Being wealthy is not a sign of sophistication. Rich people make dumb investments to.