Christopher Cox, in China for a financial summit of the leading world economies and talks with Chinese officials, said that given his role as a regulator he could not comment on the uproar over commodities broker Refco Inc., which is in the middle of an accounting scandal.

But he noted that the SEC has responded to a raft of such cases by almost doubling its resources and adding more enforcement and inspection personnel.

Refco, the largest independent U.S. commodities brokerage firm, began shutting down its main stock brokerage business Friday after fraud charges were filed against the firm's former chief executive. The crisis has unfolded with unprecedented speed.

The nervousness over Refco's health has extended from investors to the futures markets themselves, though Cox would no comment on those concerns.

"There is always the possibility for broader effects from individual cases," Cox said. "That is why the SEC has a special unit for looking over the horizon and around the corner to discover whether or not such risks are materializing."

In August, Refco's shares rose 25 percent on the first day of trading of its initial public offering. But it went from one of Wall Street's rising stars to scandal and a looming cash crisis in just five days. On Monday it announced its chief executive, Phillip Bennett, would go on leave after paying the company US$430 million (euro360 million), plus interest, to account for bad debts hidden in another entity under Bennett's control.

Refco's stock has lost more than 70 percent of its value since its Oct. 7 close.

Cox said that in his meetings with Chinese officials he would discuss initiatives to help train Chinese stock regulators and work more closely on investigations.

Some 30 Chinese companies have sold shares in the United States, which is the world's largest securities market. But recently many big companies have opted to issue shares in Hong Kong instead due to tough U.S. rules on accounting and financial disclosure. China's own markets, meanwhile, are plagued by complaints of fraud, insider trading and other abuses.

"I think listing on American exchanges would be a good thing for Chinese companies because it represents the gold standard," Cox said.

Failure to put such standards in place will inevitably dent investor confidence, he added.

"There is a premium to be paid for that risk. If the premium is high enough, money will fly away," he said.

-- Elaine Kurtenbach (AP Business Writer)