White House to nominate 2 Democrats to SEC: source

By Rachelle Younglai

WASHINGTON (Reuters) - The White House is expected to nominate two Democrats on Friday to fill empty seats at the U.S. Securities and Exchange Commission, which has been operating with three Republican commissioners for several weeks amid worsening market turmoil.

The nominees will be Elisse Walter, former deputy director of the SEC's corporation finance division, and Luis Aguilar, a former SEC lawyer, a senior administration official told Reuters on Friday.

Walter is currently an executive vice president with the Financial Industry Regulatory Authority. Aguilar is a partner at the law firm McKenna Long & Aldridge.

The five-member SEC, a key U.S. investor protection agency and market watchdog, has been operating for several weeks with just three Republicans. Democrats Annette Nazareth left at the end of January and Roel Campos in September.

Senate Majority Leader Harry Reid, a Nevada Democrat, in November recommended Walter and Aguilar to the White House for its consideration.

"Senator Reid is pleased that the White House intends to nominate these two individuals. He looks forward to the Senate confirming them as quickly as possible," Reid spokesman Jim Manley said in a telephone interview.

SEC commissioners are nominated by the president and must be confirmed by the Senate. However, Reid has been in a battle with President George W. Bush over a number of federal agency nominees, prompting the Democratic leader to keep the Senate open during its current two-week break to block Bush from making any temporary so-called recess appointments.

A full commission would allow SEC Chairman Christopher Cox to tackle more contentious issues, such as giving shareholders increased access to the corporate proxy statement.