Goldstein Loses Free-Speech Appeal In Mass.’s Highest Court

Jul 6 2010 | 1:02pm ET

In his ongoing battle with the Commonwealth of Massachusetts, the third time was not the charm for Bulldog Investors founder Philip Goldstein.

The state’s Supreme Judicial Court on Friday rejected Bulldog’s appeal of a $25,000 fine levied against it by Massachusetts Secretary of the Commonwealth William Galvin more than three years ago. The appeals court, the state’s highest, ruled that New Jersey-based Bulldog violated Massachusetts securities laws by providing information about itself to a non-accredited investor. Bulldog’s funds are not registered in Massachusetts.

The ruling upholds two lower-level decisions, first from a Massachusetts Securities Division hearing officer and then a Boston Superior Court judge, which found against Bulldog. All three stem from Galvin’s January 2007 cease-and-desist order against Bulldog.

Bulldog had maintained that Galvin had no jurisdiction over it and that its rules violated the hedge fund’s First Amendment right to free speech.

It is unclear whether Bulldog plans to further appeal the case, but it would certainly be no surprise if the hedge fund did so. Goldstein in February sued Galvin, who he once called a “pompous ass,” accusing him of singling out Bulldog because of Goldstein’s outspokenness.

After losing the first court decision in October, Goldstein told Reuters, “apparently, if you live in Massachusetts, you have to be rich to read truthful material on a hedge fund Web site.”


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