Subject: File No. S7-25-06
From: Mom and Pop

May 7, 2007

Risk exposure can not necessarily follow a single formula as a young person with years of future earning potential can afford to be more daring than a retiree whose only source of present and future income is a retirement fund. What is lacking in current regulations (which are ineffective anyway due to self-regulation) is not only adequate protections for those who cannot afford high risk exposure, but also the lack of accountability for financial advisors and institutions who expose clients to inappropriate risk and take no responsibility, even while collecting commissions.
Regarding this set of proposals, a particular inquiry to the hedge fund industry is somewhat unsettling as it appears to ask about the level of protections for consumers that the hedge fund industry can tolerate before its ability to obtain new investment money is impeded. This sounds a little too much like the need to perpetuate a pyramid scheme and implies an acceptable collateral damage component. Has anyone actually determined how many chickens the fox gets to eat before the SEC can no longer stomach the messy body count? Perhaps this is a philosophical question as to just what is the purpose of the SEC? I would suggest that it probably at the very least should keep the fox out of the hen house and definitely away from Mom and Pop.