A Crucial Vote at the SEC

Cox, a Republican, can count on two votes from fellow GOP commissioners, and he can count on Democrat Roel C. Campos to be populist and aggressive in supporting shareholder rights. For example, Campos recently gave a speech in which he wholeheartedly embraced the concept of majority voting.

So to avoid a 3-2 split and to win a more palatable 4-1 tally, Cox needs to bring Nazareth along for the ride. Which is why governance experts are watching her closely. Before being appointed an SEC commissioner in August 2005, she was the agency's director of the division of market regulation for more than five years. She also served as senior counsel to former Chairman Arthur Levitt and has been a key advocate of global sharing of market oversight procedures. Before joining the SEC, Nazareth worked on Wall Street.

"She's a lifer," says a former SEC official who is now in private practice. "She's not a very political person." He does not think the Democrats' sweep of Congress will embolden Nazareth to challenge Cox. "That might happen if the presidency had changed and Cox were now a lame duck, but that's not the case," says the source.

As for the Dec. 13 decision, "the question about Cox is whether he is going to be a purist and demand transparency or he is going to be a pragmatist and say, 'We need something Corporate America can live with.'" Nazareth may be at the heart of making that decision.