The case that Massachusetts brought against Philip Goldstein’s Bulldog Investors hedge fund for soliciting investors over the Internet saw its first fireworks on Friday, when Bulldog filed a motion on Friday to have the Massachusetts Superior Court hear its case, HedgeWorld News reports. Bulldog wants its case heard in that venue rather than by the Massachusetts Securities Division so that it can mount a full defense, one centered on its First Amendment free speech rights. Goldstein says that the Division will not judge his case impartially.
But on Monday, the state rejected Bulldog’s request to drop its proceedings against the enforcement action, saying the focus of the case is whether the firm did, indeed, offer unregistered securities in violation of the state’s securities act.
Bulldog responded by saying that there are 11 people or entities mentioned in the enforcement action and that the state has to prove each of their connection to the solicitation. The firm also said that the materials it sent out to a potential investor did not, in fact, constitute a solicitation since that investor signed an agreement saying that the materials didn’t constitute an offering.
Finally, Bulldog said, “Facts currently available suggest that Brendan Hickey [the investor who received Bulldog’s materials] not only has not been harmed by any actions of the respondents, but also that he visited the Bulldog Investors website for the sole purpose of obtaining information to be used in a separate private action.”
The hearing for the enforcement action is scheduled for April 11.