Subject: File Number S7-09-09

July 27, 2009

Dear SEC,

I am sending this e-mail in adamant opposition to the recently proposed controversial new requirement for federally registered investment advisers that would mandate an annual surprise audit of all discretionary accounts of an investment adviser by an independent public accountant.

As a member of the FPA of New York and a practicing financial planner and investment adviser for 25 years, I am well aware of the public's concern with regard to Bernie Madoff and various Ponzi schemes. However, the proposed surprise audits appear to be more of a political reaction to public criticism and congressional pressure rather than an effective regulatory response.

These Ponzi schemes uncovered by the SEC had nothing to do with fees deducted by investment advisors. As far as I am aware, there have not been any systemic problems in this area and, therefore, I strongly believe that the proposed surprise audits are unnecessary. In addition, they would be costly and burdensome, particularly for small, independent investment advisers.

If the objective is enhancing consumer protection, a more effective action would be for Congress to appropriate additional resources to the SEC to hire and train additional examination staff to increase the regular audit cycle of investment advisers.

Thank you for your consideration,


Kevin J. Donnelly