Subject: File No. S7-25-06
From: Eric G Potwardowski

January 27, 2007

Dear sir or madam. I strongly oppose the proposal to raise the minimum net-worth requirement needed to invest in private funds from $1,000,000 total net worth to $2.5 million liquid net worth. Being a physician, I understand the motivation of those in public service or professional organizations seeking to protect the average citizen from fraud or unnecessary risk. However, the SEC should be providing incentives for hedge funds and private equity firms to increase their number of prospective and actual clients by allowing greater financial oversight and regulation. More and more individuals are taking responsibility and control of their financial future. Why not allow them to pursue hedge funds if the managers are willing to allow audits, oversight and other appropriate regulation? Competition strengthens our economy. It's time to allow the American investor, who does his due research, to invest with companies that may outperform the market and their mutual fund peers.
John Mauldin has testified before Congress before about the inequity of the current situation.
"Why do we assume those with less than $1,000,000 to be sophisticated enough to understand the risks in stocks (which have lost trillions of investor dollars), stock options (the vast majority of which expire worthless), futures (where 95 % of retail investors lose money), mutual funds (80% of which underperform the market), and a whole host of very high-risk investments, yet deem them to be incapable of understanding the risks in hedge funds?" Please do not go forward with this proposal but do begin to offer hedge funds willing to submit to greater regulation the opportunity to market their products to the American investor.