From: Jonathan Lach
Sent: March 9, 2007
Subject: File No. S7-25-06

Dear SEC:

I think removing the scienter element from "fraud" is a mistake and will result in many inadvertent, innocent "frauds," which surely is not what you seek. I also think raising the affluence definition to $2.5 million is a mistake. Many, if not most, hedge fund strategies are less risky than 100% long equity mutual funds. Why limit the investment choices of the less affluent, who need good investment performance the most? One might counter that frauds (the old-fashioned, intentional sort) do seem to be more common among hedge funds. If that is the concern you seek to address, I suggest that requiring independent custodians and auditors for every hedge fund would be a far more effective approach. Thanks for your consideration.


Jonathan Lach

BlueStar Capital Management LP
993 Post Road East
Westport, Connecticut 06880