"It's only fair" to put executives and employees on the same footing, SEC Commissioner Cynthia Glassman said at a Securities and Exchange Commission meeting before a vote to adopt the new rule.

Congress ordered the ban as part of a law adopted over the summer following Enron's collapse into bankruptcy and a wave of corporate scandals.

Many ordinary Enron employees lost nearly all their retirement savings as the energy trader's stock plunged in the fall of 2001 and they were blocked from selling it for about three weeks during a blackout period related to a change in plan administrators.

Top Enron executives such as then-chairman Kenneth Lay and company directors, on the other hand, had reaped hundreds of millions of dollars by selling their company stock in 2000 and 2001.

If company officials or directors violated the new ban, they could be subject to prosecution by the SEC, and the company and its shareholders could sue the executives to recover profits from the prohibited stock sales. Companies must notify the SEC of upcoming blackout periods for employees.

Still, Commissioner Roel Campos expressed concern that the new rule only applies if the blackout period lasts more than three straight business days - enough time for company stock to drop sharply.

It "presents an opportunity for mischief," Campos said.

The new rule had been issued for public comment by the SEC late last year. It was adopted unanimously by the five SEC commissioners, including outgoing agency Chairman Harvey Pitt, who resigned under pressure in November after a series of political missteps.

The rule was the latest in a series of administrative moves by the SEC in recent weeks putting into effect the law Congress enacted last summer to combat corporate fraud and restore shaken public confidence in the integrity of corporate America.

The SEC is working against a Jan. 26 deadline under the law to turn out new rules for most of its provisions. The ban on executives' stock sales and other rules take effect on that day.

One of the authors of the law, Rep. Michael Oxley, R-Ohio, trained his sights Wednesday on what he said were problems in how mutual fund companies operate that can hurt investors.

Mutual fund companies spend billions of dollars on so-called "soft dollar" arrangements with brokerage firms to buy stock research, Oxley noted in a speech. Because the soft dollar payments are tied to the volume of trading that mutual fund managers do with the brokerage firms, they may not encourage fund companies to demand the best research, he said.

While the arrangements are legal, "It is legitimate to raise questions about soft dollar arrangements and their effect on investors' returns," said Oxley, who heads the House Financial Services Committee. He added that the panel "might explore" the subject this year.

At its meeting, the SEC also adopted rules tightening companies' financial disclosures and requiring companies that use "pro forma" reporting -- a type of financial reporting designed to play down negative results -- to ensure that the information was not misleading or false.

Pro forma results, especially favored by high-tech companies, exclude one-time items -- usually charges against earnings -- and are touted as a view of the performance ongoing operations. They show up in corporate press releases announcing earnings and often paint a much different picture from the official results calculated that are filed later with the SEC.

-- Marcy Gordon