Goldstein Takes First Amendment Fight To CNBC

Feb 22 2007 | 1:28pm ET

Philip Goldstein, Laura Unger and Richard Blumenthal debate on CNBC.Hell hath no fury like a hedge fund manager scorned, especially if that hedge fund manager is Bulldog Investors' Philip Goldstein. Yesterday, he took to the airwaves in his battle against Massachusetts Secretary of State William Galvin, who is suing Goldstein and his firm for allegedly soliciting non-accredited investors.

“What’s shocking is that Secretary Galvin doesn’t seem to have any understanding of the First Amendment,” Galvin told CNBC’s Melissa Francis yesterday. And he offered to put his money where his mouth is, challenging his fellow panelists, former Securities and Exchange Commissioner Laura Unger and Connecticut Attorney General Richard Blumenthal to bet $100,000 that he’d win his battle with Galvin.

“On First Amendment grounds, we will win this case,” Goldstein proclaimed. “And it won’t even be close.”

Blumenthal was just as sanguine that he wouldn’t, though he didn’t make the wager. “That’s an easy bet for a qualified investor,” he said. “I’m not a qualified investor for that bet.”

But he called Goldstein’s free speech posturing “very weak ground,” because “clearly if there is a solicitation or marketing, advertising, some kind of public offering, he [Galvin] is entitled to regulate.”

Goldstein was having none of it, challenging Unger or Blumenthal “to find any First Amendment lawyer who’s not going to agree that this regulation, this attempt to strike down free communication, is going to be invalidated by a court. There’s no doubt in my mind that this is perfectly legal communication.”

And, as is his wont, he turned his ire on his regulatory foes. “Mr. Blumenthal, it is amazing to me that regulators like yourself could just blow off the First Amendment. You test a law or regulation against the First Amendment, not the other way around.” And, of course, there’s no love lost between he and Galvin, who Goldstein recently called a “pompous ass.”

A spokesman for Galvin said the secretary would have no comment on Goldstein's statements or the pending lawsuit.

“We had attempted to seek a settlement with Secretary Galvin, but he declined to want to settle this,” Goldstein told Francis. “Apparently, he’d rather spend millions of dollars of Massachusetts taxpayer money on this silly case than use it for things like education or potholes.”

Ba-zing! Whoever plans to run against Galvin in 2010 may want to consider buddying up with Goldstein right now.


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