Subject: File No. S7-09-09
From: Joseph B Bronson, Ph.D
Affiliation: Equity Fixed Income Analyst ECM Investment Management, Inc.

July 2, 2009

I am writing in response to the SEC's Proposed Changes tothe Custody Rule, Release No. IA-2876.

I am employed by an SEC Registered Investment Advisor, and have worked in the securities industry since 1991.

I wanted to take this opportunity to formally object to the proposed amendments to the custody rule that would subject investment advisers to a surprise audit by an accounting firm, solely because those advisors automatically deduct client fees from their investment accounts, per the client agreement.

If passed, this regulation would require surprise audits at approximately 9,575 SEC registered firms. I can understand the need for increased regulation in the financial services industry, but the costs involved in implementing these audits would be high, and a lot of time and manpower would have to be dedicated by our firm to do so. Ultimately, these increased costs would end up being passed on to our clients, the very individuals this additional regulation is designed to help.

In my opinion, the surprise audit proposal appears to be more of a reaction to the very public criticism of the SEC in the wake of the Madoff scandal, as compared to an effective and legitimate regulatory response. The Madoff scandal and other Ponzi schemes were allowed to happen, in my opinion, due to the lack of aggressive enforcement by the SEC and FINRA of current rules and ignoring repeated warnings from the media and whistle-blowers. Most importantly, the Madoff scandal and other Ponzi schemes uncovered by the SEC had nothing to do with fees deducted by investment advisers which is the purpose of the proposed surprise audits.

As far as I am aware, there have been no systemic problems in this area, and the additional costs that will be borne by investment advisors and clients is unnecessary.
There have been no news reports of investment advisory firms stealing billions of dollars from clients via a quarterly management fee deduction that is agreed to between the client and the advisory firm. Our client's assets are held at third-party custodians, and the amount of the fees debited for our services are always clearly itemized on the client's monthly statements.

Madoff and others stole from clients by generating fictitious statements, not by debiting their investment advisory fees from client accounts.

Submitted this day, July 2, 2009 from Newport Beach, CA.

Joseph Bronson, Ph.D
ECM Investment Management Inc.