Former CIA head Webster had been Pitt's and other Republicans favourite for the role and was elected in a narrow 3-2 vote by the commission. But since the appointment it has been revealed that Webster was on the audit committee of US Technologies, which is now facing allegations of financial fraud.
The appointment has now been referred to the SEC's inspector-general. Democrats have called for president George W. Bush to replace the embattled chairman after growing concern over the body's independence.
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