Bulldog Takes Mass. Fight To Supreme Court

Feb 3 2012 | 12:26am ET

Bulldog Investors has made good on its pledge to take its free-speech fight to the U.S. Supreme Court.

The New Jersey hedge fund on Wednesday filed its petition for writ of certiorari with the country's highest court, seeking to have a three-year old fine for providing information about itself to a non-accredited investor overturned. Bulldog and its outspoken founder, Philip Goldstein, had no luck on that front in the courts of Massachusetts, where the fine was levied by Secretary of the Commonwealth William Galvin.

Bulldog's appeal to the Supreme Court attacks Galvin's fine on two fronts, free-speech and jurisdiction. The petition is something of a Hail Mary pass for Bulldog—not only is the Supreme Court its last chance to junk the fine and make its point, but the Court accepts less than 2% of the petitions it receives.

On the bright side for Bulldog, it's enlisted famed constitutional lawyer and Harvard University law professor Laurence Tribe to serve as its counsel. Tribe has argued 34 cases before the Supreme Court.

Tribe called Massachusetts' branding of its law a "disclosure rule" "Orwellian" and asks the court to consider the fact that the Bulldog e-mail in question was truthful and not misleading. It also blasts Massachusetts for, in effect, saying that only rich people can learn about hedge funds.

The Supreme Court "has repeatedly rejected the 'highly paternalistic approach' that consumers should be 'kept in ignorance,'" the petition reads.

"A selective 'rich readers only' rule is precisely the kind of paternalistic snobbery that this Court has repeatedly condemned in commercial speech cases," it continues.

"The state's attempt to portray its ban on speech as a 'disclosure' rule, its creation of an audience-based censorship regime (in which only some members of the public are allowed to receive Bulldog's speech), and its reliance on sheer speculation" all warrant Supreme Court review. The petition goes on to say that the Court "has never held that a ban on truthful speech may be treated as a disclosure rule."


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