Securities Officials In Massachusetts File Charges Against Bulldog Investors And Principal, Phillip Goldstein

The Massachusetts Division of Securities has filed an administrative complaint against Bulldog Investors General Partnership and the company’s principal, Phillip Goldstein. Bulldog Investors and Goldstein, as well as other individuals and firms, are being charged with offering unregistered securities for the purpose of selling them in Massachusetts.

The securities officials claim that the hedge funds allegedly failed to restrict prospective investors from accessing general advertising and offering content on their web site. The securities division says that while hedge fund offerings do not have to be registered with the Massachusetts Division of Securities, there are SEC guidelines for making private offerings online. This includes making sure that private offerings are password-protected so that only the potential investors that the issuer has assessed as sophisticated enough or properly accredited can view the materials. According to the complaint, Bulldog did not control access to the information, which “constitutes an unregistered, non-exempt public offering of securities in Massachusetts.”

Goldstein allegedly told the division that anyone who agreed to view the offering content online had to agree that the information was not a solicitation. The complaint however, claims that , “A disclaimer such as the one on the Bulldog web site does not constitute an appropriate or adequate control over a publicly accessible Web site that displays advertising and/or offering materials for securities.”

Goldstein is is the co-founder of Bulldog Investors and the president of Kimball & Winthrop. He is also the man who was successful in filing a legal challege against the SEC’s rule mandating that hedge fund advisors must register with an agency.

Other parties named in the complaint include Full Value Partners Limited Partnership, Opportunity Partners Limited Partnership, Kimball & Winthrop Inc., Opportunity Income Plus Fund Limited Partnership, Spar Advisors LLC, Full Advisors LLC, Bulldog Investors Co-founder and Principal Steven Samuels, and Bulldog Investors principals Rajeev Das and Andrew Dakos.

The complaint says that securities officials want the parties that are named to make sure that their offerings are in compliance with the law. They are also seeking an administrative fine, as well as a cease-and-desist order.

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Massachusetts charges Bulldog Investors, Investment News, January 31, 2007
Secretary Galvin Charges Phillip Goldstein and Bulldog Investors for unregistered securities offering, Securities Division, January 31, 2007
Related Web Resource:

Goldstein v. Securities and Exchange Comm’n, No. 04-1434, DC Circuit, June 23, 2006