The White House immediately said it supported Mr. Cox, who has said he would resign at the end of the Bush administration. Mr. Cox said he had moved against short sellers and was doing all he could to stem the financial crisis.

“Now is not the time for those of us in the trenches to be distracted by the ebb and flow of the current election campaign,” Mr. Cox said in a statement released by the commission. “It is precisely the wrong moment for a change in leadership that inevitably would disrupt the work of the S.E.C. at just the wrong time.”

Mr. Cox is a former White House aide to President Ronald Reagan and a former Republican congressman from California. Some conservative columnists and commentators, including Robert Novak, supported him as a running mate for Mr. McCain. Writing in The American Spectator earlier this year, Quin Hillyer said that conservatives would rally to a Cox selection and called him “the best choice, bar none.”

In recent weeks, Mr. Cox has also stepped up his criticism of short-sellers, particularly those who engage in “naked” short selling. While short sellers are supposed to borrow shares before selling them, naked shorts do not borrow. That saves the cost of borrowing, though the trader is still vulnerable to losses if the share price rises.

Opponents of short selling believe that it can force share prices down and destroy confidence in a company that might otherwise survive. Regulators have long thought that the practice was crucial for efficient markets to function, but earlier this year the S.E.C. imposed temporary limits on short selling of some financial stocks. Financial share prices rallied when those limits were announced but fell during the period in which the rule was in effect.

Share prices for many financial companies shot up Thursday afternoon after plunging the day before in the wake of the government decision to take control of the American International Group, a large insurance company, to prevent it from collapsing. Financial shares were especially hard hit Wednesday, with Morgan Stanley plunging 24 percent, to $21.75, and its chief executive, John J. Mack, blaming false rumors spread by short sellers. On Thursday, Morgan Stanley regained part of that loss, rising 3.7 percent, to close at $22.55.

Image The British bank Lloyds TSB, led by Eric Daniels, fourth from left, said this week that it would take over HBOS, a mortgage lender led by Andy Hornby, third from left, after HBOSs stock tumbled, a move that was widely attributed to short selling of HBOS. Credit... Pool photo by John Stillwell

The latest moves against short sellers began Wednesday. In the morning, Mr. Cox announced new rules to prevent brokerage firms from selling a stock short if they previously had sold the stock short without having borrowed it. That night, he said that he would propose more rules, to force large short sellers to disclose their positions.