From: Michael Lenz
Sent: February 22, 2007
Subject: File No. S7-25-06

Dear Sirs,

I do not support categorically raising the accredited investor level. It is wrong to limit investors options do to only their net worth while not taking into account their investment knowledge. There are many of us out here that have studied very diligently to gain the knowledge of how to best manage our investments for our situation. Many of us have a lower net worth than one million, but more knowledge about investment risk than many accreted investors. It is discrimination of the "poor" in my book to limit our choices in that manner. We are not less intelligent than an accredited investor, only less wealthy. I feel there are better ways of protecting smaller investors that would not discriminate against them by their measure of wealth.

One such idea is the method they use in England where investment advisors are required to determine the sophistication and suitability of potential investors regardless of a net worth level.

Another is a proposal from Roel Campos concerning voluntarily registering advisors and easing the marketing restrictions for those advisors, providing a degree of oversight and authority to the SEC.

I also support John Mauldin's idea of requiring SEC oversight in the form of what he calls a Hedge Fund Investment Company or HFIC. Briefly, a HFIC would be allowed to register with the SEC (or CFTC if there is a commodity focus) as an HFIC. They would be required to have an annual audit, at least quarterly independent valuations of their assets, and independent administrators, plus they would be subject to SEC or CFTC advertising rules. Nearly all the rules that would apply to a mutual fund would apply to an HFIC. There would be very few, if any, limits on the strategy the fund could employ, and they could charge a management fee and an incentive fee. They would have to fully disclose not only the relevant risks, but also their strategies, fees, personnel, and management experience. This is a brief outline of MR. Mauldin's idea. More can be obtained from him at . I believe he may have also submitted this idea himself for consideration.

Basically what I feel would be fair is a combination of these ideas opening up "registered" Hedge Funds to all investors, but at the same time regulating those funds that want to compete in this manner.

Thank You,

Michael Lenz