Bulldog Raps Mass. For Inaccurate Statements

Jul 9 2007 | 2:31pm ET

The battle between Bulldog Investors and Massachusetts regulators is turning nastier.

In a letter to James Cappoli, a securities lawyer in Massachusetts Secretary of State William Galvin’s office, Bulldog attorney Andrew Good accused the lawyer of hypocrisy.

Bulldog Investor's Phil GoldsteinBulldog Investor's Phil Goldstein“The Enforcement Division’s mission includes assuring the accuracy of statements about securities,” Good wrote, according to HedgeFund.net, which obtained a copy of the missive. “It must adhere scrupulously to its own standards.”

Good’s complaint referred to a recent hearing, where Cappoli claimed a Bulldog brochure available through its Web site said “Bulldog Investors has produced above average returns with below average risk, enticing the investor to invest with no risk.”

Good’s letter objected to the use of “entice” and questioned Cappoli’s understanding of the document. The Bulldog lawyer noted that “below average risk” and “no risk” are not one and the same, and denied that the firm has ever claimed to “always” do better than the Standard & Poor’s 500.

Galvin in January filed suit against New Jersey-based Bulldog, accusing it of marketing its hedge funds to non-accredited investors. Bulldog founder Phillip Goldstein has savaged Galvin’s complaint, painting it as a First Amendment battle.

“I’m not going to let some pompous ass sitting in Boston tell me I can’t talk to somebody or give somebody information when they ask for it,” he said in February. “This is not really about hedge funds; it’s about the First Amendment, and I think Galvin is just trying to get a trophy.”


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