NEW YORK ? Just when the scandals at the likes of Enron and WorldCom start to seem to be distant memories, new examples of alleged corporate misdeeds cropped up at Marsh & McClennan, AIG and others in the insurance industry this year.

And that?s exactly why the Securities and Exchange Commission needs to keep its activist agenda as the top spot at the federal regulatory agency changes hands.

Experience has shown that when companies have too much wiggle room, they abuse it. More oversight directed by the SEC is helping to teach corporate America the price of wrongdoing.

?The role of the SEC is to find the best balance between free markets and regulation, and then it comes down to how it is using its enforcement,?? said Amy Hutton, associate professor at Dartmouth College?s Tuck School of Business.

This issue moved to the forefront this week after William Donaldson announced he would step down as chairman of the SEC later this month. President Bush immediately nominated Rep. Christopher Cox, a Republican from California, to take his spot.

Should Cox be confirmed by the Senate, he will have big shoes to fill. In Donaldson?s 28 months on the job, he has been tough regulator and reformer, zealous about rebuilding investor trust while corporate scandals and plunging stock prices were unnerving the public.

That wasn?t the role many expected him to take. As a friend of the Bush family, it was assumed he would be a close ally of the business world thanks to his credentials ? a Republican who was a former investment banker and had previously led the New York Stock Exchange as well as Aetna Inc.

Instead, Donaldson championed many proposals strongly opposed by the business community. He went after mutual fund companies and has pushed to overhaul stock trading. He cracked down on corporate conflicts of interest and moved to increase financial disclosures.

And ? maybe most importantly ? he has been willing to cross party lines on issues he deemed crucial. That earned him criticism from many business groups that felt his activist agenda was a burden on corporations.

The big question now is how Cox will proceed. In his remarks after being nominated for the top SEC job on Thursday, he vowed to stand up for ?clear and consistently enforced rules?. But there is no way to know yet what that really means.

He has a solid background for the job. A former corporate attorney who first won his House seat in 1988, he is a veteran of the Financial Services Committee.

He supported the Sarbanes-Oxley Act of 2002, the corporate reform act aimed at stopping Enron-like business scandals. He also is a longtime advocate of repealing taxes on capital gains as well as on dividends.

But Cox might also be the candidate the business lobby is looking for. He sponsored the 1995 Private Securities Litigation Reform Act to restrict the ability of investors to file securities-fraud lawsuits. The legislation ultimately became law after Congress overrode President Clinton?s veto.

He also has been opposed to efforts by the Financial Accounting Standards Board, the US accounting rulemaker, to require companies to expense all stock options from their earnings.

?We can only hope that the all the lessons learned from the scandals of the recent past have changed his views, and he won?t only take a pro-corporate stance,?? said Anthony Sabino, associate professor at Peter J. Tobin College of Business at St. John?s University.

The tone Cox sets at the SEC will determine how tough the agency is on corporate crime fighting. As Tuck?s Hutton points out, how officials interpret regulation and enforce it will be very telling in figuring out the SEC?s agenda going forward.

For instance, initiatives to require hedge fund managers to register with the SEC or mutual funds to have an independent chairman ? both of which have come under heavy opposition from business groups ? could go nowhere if the new chairman does little to implement them.

Then again, maybe Cox will surprise the investing public and business world, too, just as his predecessor did.

When Donaldson announced he was leaving the SEC, included in his parting remarks were his hopes that the next chairman ?will leave politics at the door?.

No doubt that is exactly where they belong.

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