Subject: File No. S7-25-06
From: Patrick S Adams, CFA

March 2, 2007

The new rules increasing the accreditation requirements are an overreaction by the SEC to regulate hedge funds, as the courts overturned the SEC in making hedge funds register. This proposal takes away the right of a large class of affuent investors, for the main purpose being lack of oversight by the SEC.

Hedge funds have proven to be an excellent investment for equity oriented investors that are seeking absolute returns versus relative returns of mutual funds. It is very narrow minded to believe an investor wants their money managed relative to a market benchmark like the SP 500 Index. That is what this proposal would do.

How can the SEC take away the right of millions of current hedge fund investors? To get out of a hedge fund that has illiquid securities could be extremely detrimental to their investment.

A better solution would be to CPI INDEX from the current rules, not to dramatically change the rules and disrupt portfolios of millions