Subject: File Number S7-09-09

July 7, 2009


I would like to add my comments regarding the proposed surprise audit by an independent public accountant for investment advisors who have custody of clients’ funds. If the advisor in fact has custody of client’s funds (Madoff) then I am in favor of it. If the funds are held by a third party custodian (Schwab) then I am not in favor of it.

Your proposal asks Should we except from the surprise examination requirement advisers that have custody of client funds or securities solely as a result of their authority to withdraw advisory fees from client accounts? 18

My response to this an unequivable NO! The SEC should not maintain the fiction that my ability to withdraw fees constitutes having custody of my clients funds. This would only hold the SEC up to more public ridicule then it already suffers from. Withdrawing fees is not custody.

I was examined by the SEC in late 2007. Part of the staff’s work was an examination on the accuracy of my fee calculation. The staff also reviewed the amount that was removed from the client’s account in the subsequent period. The staff had no problems with my fees.

Bernie Madoff and Matt Weitzman were both crooks. No amount of audit work will catch them.

Very truly

Bernard M. Kiely, CPA, CFP
Kiely Capital Management, Inc