Subject: File No. S7-25-06
From: Ken Serger

January 29, 2007

On a philosophical basis, I'm very much opposed to the SEC's proposal to raise the net worth requirement for hedge fund participation. The concept of equality is one of the basic tennants of our country and to restrict nearly the entire population of the U.S. from investing in a hedge fund is, in my mind, unthinkable. Surely, we would never restrict black people, or females, or Jews or any other race or religion, so how can the SEC consider restricting everyone but the wealthy? The whole concept just stinks.
I appreciate the fact that the SEC is trying to "protect" us, but the fact is that regardless of the investment vehicle chosen, there is always risk. Granted, the simple "buy low, sell high" concept might be better understood by the average person but that surely doesn't eliminate the risks of losing money by making poor decisions on which stocks or mutual funds to buy. A professionally managed hedge fund, on the other hand, could often result in better returns than many individuals could get managing their own money.
Finally, I think it's very short-sighted for the SEC to assume that the "non-wealthy" are so stupid and incapable of making money decisions that they need to protect us from ourselves. Yes, there are many Americans who are, indeed, uneducated in these areas but most of those people probably don't even know what a hedge fund is. So, really, what is the likelihood that they would invest in one? For those who might consider a hedge fund, give them the choice. It's their money and they should be given the opportunity to research their choices and make their own decisions...just as they would if they were buying a stock or mutual fund.