The last time a lawmaker stood at the helm of the Securities and Exchange Commission, President Richard Nixon was in the White House.

That all changed last week, when President Bush nominated Rep. Christopher Cox to lead the agency. If Cox wins Senate approval, the California Republican will be the first to move directly from the halls of Congress into the top slot at the SEC, historians say. His Nixon-era predecessor joined the agency after he lost an election.

The Cox nomination raises questions about how he would address regulation and enforcement cases that involve accounting and securities firms, which have been among the largest donor groups to his political campaigns over 16 years in Congress. The SEC oversees both groups, and in recent years agency leaders have imposed millions of dollars in penalties against investment banks and accountants.

"This is rather new for the SEC, to have a sitting member of Congress," said Carla L. Rosati, executive director of the SEC Historical Society, a nonprofit group in Washington.

The situation is so unusual that the agency's ethics guidelines do not cover the issue of political donations, according to an SEC spokesman. Neither do rules adopted by the Office of Government Ethics, which is charged with preventing conflicts of interest in the executive branch. Its impartiality provisions cover potential conflicts such as legal or consulting work performed for former clients in private practice -- but not campaign cash.

Cox has received more than $250,000 from securities firms and $200,000 from accounting firms in the course of his congressional tenure, according to the Center for Responsive Politics. Cox's spokesman referred calls to the White House.

"Like all federal employees, we would expect he would abide by the rules and regulations," said administration spokeswoman Erin Healy.

Lawrence M. Noble, executive director at the Center for Responsive Politics and a former general counsel to the Federal Election Commission, said Cox's fundraising would undoubtedly come up in his yet-to-be scheduled confirmation hearing before the Senate Banking Committee.

"If he's received heavy support from the securities or accounting industry, it's something he's got to address," Noble said. "I think it's fair game to ask at his confirmation hearing."

The nomination comes at a pivotal moment for the SEC, which has passed scores of new governance and disclosure rules and filed more than 1,700 enforcement cases during the 21/2 years of William H. Donaldson's leadership. Business groups have argued that the agency has gone too far.

Cox is a self-described free enterprise proponent who sponsored a 1995 law that limits investors' right to sue. A former corporate lawyer at Latham & Watkins LLP, Cox possesses law and business degrees from Harvard. In a brief news conference last week, Cox said stock markets depend upon the integrity of their players. He also praised the work of the agency staff.

"To me the issue is not so much are you going to be under the thumb of accounting firms or securities firms," said former SEC general counsel David M. Becker. "It's more, how are you going to approach the job? What you don't know is whether someone who's spent his life in politics will have more political reflexes."

It is an issue that the SEC has not faced for decades.

In the 1960s, President Lyndon B. Johnson appointed former representative Hamer H. Budge, a Republican from Idaho, to a slot at the agency at the urging of the Republican House leader after Budge lost a congressional race, according to a history of the SEC. A few years later, Nixon promoted Budge to the agency's chairmanship, according to author and Washington University law school dean Joel Seligman. Nixon also named A. Sydney Herlong, a retired Democratic congressman from Florida, to serve on the SEC, according to Seligman's book "The Transformation of Wall Street."

David B.H. Martin, a former SEC division director, said the institutional culture of the agency and its mission to protect investors exert a powerful force on commissioners that sometimes is stronger than partisan positions. Martin pointed out that former SEC chairman John S.R. Shad, who had a reputation for looking askance at new regulations, cracked down on securities lawbreakers during his tenure in the 1980s. For instance, Shad gave a famous speech in which he warned that the commission would come down with "hobnail boots" on people who violated insider trading rules.

Investor advocates predict that Cox will support tough penalties for individuals who break securities laws and manipulate the stock market -- in keeping with his philosophy and the administration's goal of encouraging more people to invest their retirement funds in stocks. But they say it is less clear whether Cox will back broad-based changes to the governance of publicly traded companies, including a controversial plan to give shareholders more power to nominate board members. Such proposals have led to outcry from trade groups including the U.S. Chamber of Commerce and the Business Roundtable.

"The question that has to be asked, and asked with great vigor by the Senate, [is], 'Is this a person who is going to act to protect investors, or are they really all about something else?' " said Damon A. Silvers, associate general counsel at the AFL-CIO. "That's why the confirmation process is so important."

If he receives the blessing of the Senate, Cox will have one other remnant of his political career to address -- $568,000 in campaign funds he has not yet spent. Election law specialists in Washington said Cox could give the money to charity, save it for another political race down the road or return it to donors.

Rep. Christopher Cox says he is a free enterprise proponent.