Hedge Fund Website Lawsuit

Court Rules Against Hedge Fund Manage over Website

A Massachusetts court has decided that Phillip Goldstein's right to free speech was not infringed upon when his firm was ordered to limit access to its website to accredited investors. The issue began two years earlier, when the Massachusetts' Secretary of the Commonwealth, filed a lawsuit against Goldstein ordering the fund manager to pay $25,000 and limit online access to the portfolios. Goldstein's hedge fund, Bulldog Investors, has been fighting hard against regulators--notably his successful crusade against the SEC requiring all hedge funds to register with the agency three years ago--and he plans to appeal the Massachusetts decision.

"This ruling is wrong and we are going to appeal it," Goldstein said. "Apparently if you live in Massachusetts you have to be rich to read truthful material on a hedge fund website," he added.
The decision will bring new attention to hedge funds at a time the loosely regulated and often secretive industry is being scrutinized more carefully and managers will likely be required to report more about how they make money.

Two years ago Massachusetts' Secretary of the Commonwealth, William Galvin sued Goldstein and ordered the fund manager to pay a $25,000 fine and restrict online access to the portfolios, which are considered private offerings.

Since then the fund's website www. bulldoginvestors. com/ says: "Our Website is currently being updated. Please check back soon. Thank you."

"We can't put anything up there because of the threat of enforcement," Goldstein told Reuters.

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