Cox, a free-market conservative who could significantly shift the agency's focus from its recent activist regulatory stance, told the Senate Banking Committee at his confirmation hearing that the SEC "must be vigilant in behalf of investors and stalwart against fraud and unfair dealing."

"My top priority will be vigorous enforcement of our securities laws," Cox said in his opening statement to the panel.

Bush last month picked Cox, a California Republican, to lead the SEC after the surprise resignation of Chairman William Donaldson, whom Bush had installed to help restore confidence in a stock market shaken by corporate scandals in 2002.

Business interests, which had chafed at Donaldson's regulatory activism and pressed the White House to replace him with someone friendlier to them, have welcomed Cox's nomination. Some investor advocates and union leaders have urged senators to reject him, saying he would disregard investors' interests and protections.

Cox, 52, chairman of the House Homeland Security Committee, is a former corporate lawyer who has been in Congress for 16 years. He is expected to win Senate approval.

"Congressman Cox brings a wealth of experience to this position, and I believe that the SEC and the securities markets will benefit from his leadership," said Sen. Richard Shelby, R-Ala., the Banking Committee's chairman.

At the confirmation hearing, the panel also was considering the nominations of Roel Campos and Annette Nazareth to fill the two Democratic seats on the five-member SEC.

Senate Democrats had insisted that the two nominations be packaged with that of Cox. Bush named Nazareth, director of market regulation at the SEC, to replace Commissioner Harvey Goldschmid, who plans to leave soon to resume teaching law at Columbia University. Campos was nominated for a second term.

The five commissioners have split in an unusual alignment over several key issues, with Bush appointee Donaldson siding with Campos and Goldschmid against his two fellow Republicans, Paul Atkins and Cynthia Glassman, as they have voted against some regulatory initiatives. Cox is widely expected to take positions more closely aligned with Atkins and Glassman.

In the House, Cox authored legislation that made it easier for companies to defend against some types of lawsuits by shareholders. He has opposed efforts to treat companies' awards of stock options to employees as expenses against the bottom line, taking the side of the high-tech companies that dot his Orange County, Calif., district.

Cox "is a defender of corporate interests whose legislative record indicates he would not protect investors if he were confirmed," the watchdog group Public Citizen said Monday.

Cox is the first member of Congress to be nominated to head the 70-year-old SEC. That puts him, if he is confirmed, in the unusual position of potentially regulating companies that donated money to his campaigns.

Cox's largest financial backers during his congressional tenure include law firms and big accounting firms. Securities and investment firms have donated more than $254,000 to Cox, according to the Center for Responsive Politics.

White House spokeswoman Erin Healy, speaking on Cox's behalf, said Monday that the legislation Cox sponsored in 1995 restricting securities class-action suits protects investors from abusive litigation.

"He will make an outstanding SEC chairman," Healy said.

Some Democrats on the Banking Committee are interested in Cox's work as a securities lawyer in the 1980s for First Pension Corp., a company accused by the government of defrauding investors. The SEC sued First Pension in 1994 for bilking investors out of hundreds of millions of dollars. Its founder, William Cooper, pleaded guilty to felony charges and received a prison sentence.

Cox has denied having any knowledge of wrongdoing by the company and its executives. He was removed as a defendant in a lawsuit by First Pension shareholders.

Cox's financial disclosure report prepared for the confirmation hearing shows that he has hundreds of thousands of dollars in money-market and mutual funds and large holdings in stocks of some big companies. He lists total holdings of between $565,004 and $1.15 million in stock of Coca-Cola Co., Newmont Mining Corp., Continental Airlines Inc. and Gold Fields Ltd. of South Africa.

Cox's wife, Rebecca, is a lobbyist for Continental, the fifth-largest U.S. carrier. The airline's CEO recently told shareholders at the annual meeting that their relationship isn't expected to present any conflicts of interest with Cox as SEC chairman.

-- Marcy Gordon