From: Franklin H
I am writing to voice my opposition to the changes proposed by File No. S7-25-06. In specific, the proposal to raise the accredited investor standards This change is estimated to reduce the number of investors permitted to invest in pooled investments by 90%. This 90% reduction will be devastating to investors who are attempting to build wealth and to traders seeking to manage money.
This change will unfairly discriminate against smart people who have not had adequate time to amass the necessary $2,500,000 in investments and those who work in the industry.
As this change does not apply to other private investments where the funds collected are spent on operational expenses in hopes of attaining a profit one day, it vilifies hedge funds.
Hedge funds by contrast, seek to preserve and grow the capital under management and are compensated base on the investors making a profit.
The SEC points to the need to adjust the accredited investor standards for inflation. However, the people with one million net worth or an income of 200,000 are still finically sophisticated and as intended are for the most part professionals or business owners. Inflation has not changed the investor profile; rather it has changed what the investor can buy with his income and net worth.
However, this change fails to recognize the incredible growth in information available to investors today. Today's investors are very well informed; there are several television stations that broadcast business and market information exclusively. The internet allows instant research information on investments and risks. In addition, the market action of the late 90ís and early 2000ís made investments and risks common knowledge in every household.
In closing, I reiterate my opposition to the changes proposed by File No. S7-25-06 to accredited investor standards.
Thank you for your attention to this matter,