Subject: 'File Number S7-09-09'

July 27, 2009

To Whom It May Concern:

I am opposed to the SECs proposal for annual surprise audit of all discretionary accounts of an investment adviser by an independent public accountant.

I realize that the Madoff scandal has put pressure on our regulators to protect the public but if the SEC had enforced the regulations they have, listened to the “whistle blowers” and the media this outrageous theft would not have occurred. The SEC already resolved one of the major problems with the custody rule, which was eliminating a loophole from registration for certain accounting firms with the PCAOB that Madoff's accountant used to avoid detection of its phony auditing practices.

The better fix for this problem is higher paid, better trained employees at FINRA and the SEC. I would support Congress appropriating additional resources to cover this expense and to increase the regular audit cycle of investment advisors. We all realize that Madoff had an accounting firm who regularly audited his books and see how that helped discover his lies. Ponzi schemes have nothing to do with the fees that advisers charge their clients. The fees are listed on the clients monthly statement, advisors send copies of their bills to both the client and the custodian and the advisor can only deduct the fee, not huge amounts of monies. This action suggested by the SEC had nothing to do with fees deducted by investment advisers. As far as we are aware, there have been no systemic problems in this area and are unnecessary, costly and burdensome, particularly for small, independent investment advisers.

The new surprise audit requirement will add additional costs to my business that will ultimately be passed on to my clients or cause us to close our business. The current compliance regulations if enforced, would be more than adequate to prevent the abuses that have taken place and guard the consumer from fraudulent advisor practices. 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 advisers.


Clare Stenstrom

Clare M. Stenstrom, CFP®
Bourne Stenstrom Lent Asset Management, Inc.