Subject: S7-09-09

July 1, 2009

Dear Sir or Madam:

I am an Financial Planning Association member and an SEC-registered adviser and am opposed to the requirement in the proposed amendments I to the custody rule that would subject investment advisers to a surprise audit by an accounting firm.

The proposed surprise audit appears to be more of a political reaction to public criticism of the SEC and congressional pressure after the Madoff scandal than an effective regulatory response. The Madoff and other Ponzi schemes resulted from a lack of aggressive enforcement by the SEC and FINRA of current rules and ignoring repeated warnings from the media and whistle blowers. The Ponzi schemes uncovered by the SEC had nothing to do with fees deducted by investment advisers. The new surprise audit requirement will add additional cost to my business that will ultimately be passed on to my clients. In order to enhance consumer protection, I would support Congress appropriating additional resources to the SEC to hire and train additional examination staff to increase the regular audit cycle of investment advisors.

Valerie E. Swan
Allegheny Investments, Ltd.