Endpoint Protection

I don't think it's possible, but I have to ask to be sure.  Is it possible for the SEP client to modified the hosts file?  We have a hosts file that has static entries and all of sudden they turn up missing.  A few people are claiming that the SEP client is removing the entriies.  If the file was modified, it would've changed the timestamp.  The timestamp remains the same.  Any thoughts?

No, SEP wont modify the host file
You are correct in the point, when sep scans a file it would modify the access time.
if your file is not changing the access time, sep is not the culprit.

SEP doesn't doesn't do all that stuff..or else "make host file read only" wouldn't have been a template in application control policy.. 

No SEP will not modify your host file.

There could be some thing else.  Run a full scan in safe mode on the machine

If nothing malicious is being added to the hosts file, but it is being blanked out, I'd look at any other security software you might be running to see if it is "protecting" the hosts file.