Subject: File Number S7-09-09

July 23, 2009

Dear Sir/Madam:

I am a member of FPA Massachusetts, and a SEC registered investment advisor. I am opposed to the requirement in the proposed amendments to the custody rule that would subject investment advisers to a surprise audit by an accounting firm. The proposed surprise audit is an understandable reaction to the public criticism of the SEC and the pressure from Congress after the Madoff scandal. However, it is not an effective regulatory response since the SEC wishes to achieve the protection of clients and their assets, which can be better achieved by eliminating the loophole in the custody rule. Accounting firms ought not to be able to avoid registration with the PCAOB which enabled Madoff’s accountant to skirt detection of their phony audit practices.

The Madoff and other Ponzi schemes were enabled by the lack of enforcement and FINRA should be held accountable for its lack of oversight of Madoff as a broker-dealer. The Ponzi schemes uncovered by the SEC had nothing to do with fees deducted by investment advisers, and the surprise audits would only be costly and burdensome for small independent investment advisers. Perhaps having more personnel at the SEC who can increase regular audits to make sure that client interests are protected will be more valuable. I would fully support any effort by the SEC to get more funding from Congress to add staff. An additional surprise audit would take time away from our client work which in this environment of high volatility in the financial markets would be counter productive for clients. I sincerely hope that SEC finds another way to protect client interests, which I am in total agreement with the SEC.

Chitra Staley
TPW Financial