Subject: File Number S7-09-09

July 7, 2009

I am writing to voice an opinion regarding the proposed changes to rules governing RIA’s or others with custody. I have no problem with the idea of an audit where clients have custody of funds. However, where LP’s already have an annual audit done, this should be sufficient as the cost burden of another audit would be a death blow to many smaller hedge funds or other LP’s such as we have. And this group is already reeling from the market declines and flight to large hedge funds. Even more importantly, I feel very strongly that RIA’s that deduct fees from their client portfolios should not be considered to have custody related to this rule, meaning there should be no annual surprise audit. Again, clients need good investment advice more than ever like my firm can offer, but the burden of this cost would be large to the smaller RIA firms like myself and would essentially put up a bigger barrier to entry for new start-ups as this would add a fixed cost. If the SEC felt there should be some restriction related to this issue, maybe the rule could be that an RIA could deduct no more than ½% per quarter without being subject to this type of audit.

Heydon Traub
CEO
Traub Capital Management , LLC