President Bush's nominee to head the Securities and Exchange Commission, Wall Street investment banker William H. Donaldson, promised Wednesday if confirmed to aggressively enforce corporate accountability rules and prosecute financial lawbreakers to help rebuild investor confidence shattered by last year's scandals.

His highest priority is selecting a new chairman of the board overseeing the accounting industry, Donaldson told the Senate Banking Committee at his confirmation hearing. The current SEC chairman, Harvey Pitt, resigned under fire in November in a flap over his selection of former FBI Director William Webster to head the accounting board. Webster also resigned.

Naming of a new board head by the SEC chairman and four fellow commissioners "is the No. 1 priority that I have," Donaldson said. "We're behind the eight ball."

Pledging to work to restore confidence, Donaldson said: "Just as the war on terrorism cannot be won overnight, neither can investor confidence be completely restored so quickly," Donaldson said. "Corporate America, Wall Street and their professional stewards -- lawyers, accountants, corporate and financial managers and financial regulators -- still have much work to do."

Donaldson, a former New York Stock Exchange chairman and Bush family friend, was designated -- with newly installed Treasury Secretary John Snow -- a member of the president's revamped economic team.

Donaldson received a friendly reception from senators of both parties on the panel, and he is expected to be confirmed by the full Senate.

Sen. Charles Schumer, D-N.Y., called Donaldson "a straight shooter" whose background qualifies him for the job of leading a now "leaderless and rudderless" SEC.

If that happens, Donaldson said, "I will demand accountability from all responsible parties. I will aggressively enforce civil penalties and work cooperatively with state and federal law enforcement agencies ... to bring those who break the law to justice."

The SEC, straining under a heavy load of investigations of corporate fraud and accounting deception, has been led since early November by lame-duck chairman Pitt.

This is the landscape confronting Donaldson: Once-mighty accounting firm Arthur Andersen is a smoldering ruin after an obstruction of justice conviction; its longtime client Enron Corp. led a parade of corporate bankruptcies, scandals and handcuffed CEOs; retirement savings have dissolved and the stock market has plunged.

Bush named Donaldson in December. Legislation enacted last summer expanded the SEC's powers to prosecute fraud and ordered the agency to issue new rules for companies, executives and accountants.

In 2001, from the perch of his own investment firm, Donaldson denounced as "terrible" a year-old SEC rule prohibiting companies from revealing financial results and other information to stock analysts and other Wall Street insiders ahead of the public -- a long-standing practice.

He called the Regulation Fair Disclosure of 2000 -- pushed by small-investor advocates and then-SEC Chairman Arthur Levitt -- "crazy in terms of what it does to the free flow of information." Like other critics, Donaldson contended it could make company executives afraid to say anything.

Years earlier, as NYSE chairman, Donaldson argued that accounting standards should be bent to attract foreign companies to the stock exchange.

While his Senate confirmation appears assured, Democrats on the Banking Committee have examined his leadership of the NYSE in the early 1990s, when floor brokers made millions of dollars in illegal trades. The trading fraud scandal later brought the first-ever criminal prosecutions of floor brokers at the exchange.

Donaldson and other senior NYSE officials are said to have quietly approved of letting brokers who worked on the exchange floor trade and share in profits with private customers.

A federal judge in 1999 accused the stock exchange of "downright anorexic" enforcement of a prohibition against floor brokers trading accounts in which they hold an interest. The judge admonished the NYSE for failing to enforce securities laws and its own rules meant to prevent brokers from getting an unfair advantage over other investors.

Known for a colorful candor, the 71-year-old Donaldson -- a founder of Wall Street brokerage Donaldson, Lufkin & Jenrette -- recently reported personal assets of between $89 million and $253 million. He was required to report only a range of assets, not specific numbers. He promised to sell his stocks in more than 50 corporations and his interests in partnerships to avoid any potential conflict of interest.