Frist's recent sale of stock in Hospital Corp. of America Inc., the big hospital operating company founded by his family, about two weeks before its price plummeted amid massive stock sales by company insiders has prompted investigations by the SEC and the Justice Department.

Cox, who was in Congress for 16 years as a California Republican and left the House to assume the SEC job last month, had been a member of the GOP leadership in Congress for the past 10 years.

"Because of my service in the congressional leadership for the last 10 years, I have recused myself in this matter," Cox said in a statement. "The purpose of the recusal is to avoid any appearance of impropriety in the (SEC's) consideration of this case."

Cox's congressional campaign fund donated $1,000 to Frist in 2000, according to Federal Election Commission records. That donation was not mentioned in the statement issued by Cox and was not given as a reason for his recusal from the SEC's investigation.

Frist has hired two private attorneys who specialize in securities litigation and insider trading cases: William McLucas, a former SEC enforcement director, and Harry Weiss, a former SEC attorney who was a co-author of a text titled "Preventing Insider Trading." Their representation of Frist was confirmed by their law firm, Wilmer Cutler Pickering Hale and Dorr. The involvement of the firm was first reported in Monday's editions of The Wall Street Journal.

Also Monday, Citizens for Responsibility and Ethics in Washington, a liberal-leaning watchdog group, said it had filed a complaint against Frist with the Senate ethics committee alleging that he engaged in "apparent insider trading" and then tried to cover it up.

Cox's statement was the first public acknowledgment by the SEC that it is investigating Frist's sale of his stock in HCA, the nation's largest for-profit hospital company.

The Tennessee Republican's sale of the stock from several blind trusts this summer came about two weeks before the company issued a disappointing earnings forecast that drove its share price down almost 16 percent by mid-July.

On Friday, the Nashville, Tenn.-based HCA said it had received a subpoena from federal prosecutors asking for documents the company believes are related to Frist's sale of company stock. Frist's office said prosecutors and SEC investigators had contacted the senator's office about the sale.

Frist sold the stock at a time when top executives and directors of HCA - including the chief executive and the treasurer - also were selling off shares worth a total $112 million. Aides to the majority leader, who is widely considered a potential presidential candidate in 2008, say he ordered his trustee to sell his shares to avoid any appearance of a conflict of interest.

Documents show that Frist was updated several times about his investments in HCA and other transactions even though they were held in blind trusts. Despite the updates, Frist insisted in public statements afterward that he didn't know what was in the trusts, specifically denying knowledge of his HCA holdings.

Frist's brother, Thomas Frist Jr., is a former chief executive of HCA and is now a director and the largest individual shareholder in the company.

Cox said in his statement that his recusal from the SEC's inquiry covers "any future action" requiring deliberation by or a vote of the SEC commissioners as well as any management responsibilities he might have related to it.

As SEC chairman, Cox normally would receive updates from agency attorneys on the course of an investigation and would vote along with the other four commissioners - two Republicans and two Democrats - on any enforcement action to be brought or settlement to be reached. Having excused himself at the outset, he would be unable to have any knowledge of or involvement in the Frist stock inquiry.

President Bush chose Cox, a free-market conservative and former securities lawyer, in June to lead the SEC after the surprise resignation of then-chairman William Donaldson.

--  Marcy Gordon; Associated Press writer Jonathan M. Katz in Washington contributed to this report.