UPDATE 1-Three former U.S. SEC chairmen endorse Obama

(Adds quotes, background, previous dateline SOUTHFIELD)

By Jeff Mason

WARREN, Mich, May 14 (Reuters) - Three former chairmen of the U.S. Securities and Exchange Commission endorsed Democratic presidential candidate Barack Obama on Wednesday, bolstering the Illinois senator's economic credentials and bipartisan appeal as he closes in on his party's nomination.

Former SEC head William Donaldson, who was appointed by Republican President George W. Bush, joined Arthur Levitt and David Ruder in backing Obama, who leads rival Hillary Clinton in the number of delegates necessary to become the Democratic White House nominee.

Levitt was appointed by former President Bill Clinton, a Democrat, while Ruder was appointed by former President Ronald Reagan, a Republican.

All three commended Obama for his approach to regulation.

"Each of us has been committed to prudent economic policy and effective financial regulation for many years," they said in a joint statement along with former Federal Reserve Chairman Paul Volcker, also an Obama supporter.

"We believe Senator Obama can provide the positive leadership and judgment needed to take us to a stronger and more secure economic future."

In the statement they praised Obama's "reasoned approach" in analyzing "the current financial crisis and the need for balanced regulatory reform."

"We believe that such a constructive approach can be extended broadly in the economic area as well as elsewhere," they said.

REGULATION

Obama has distinguished his economic policies from Clinton, a New York senator, and Republican candidate John McCain, an Arizona senator, in recent weeks by opposing a reprieve on a gasoline tax over the upcoming summer months.

On Tuesday, he compared conditions during the Great Depression to the current U.S. housing crisis, blaming both in part on poor financial regulation. He has promised better regulation of mortgage lenders and other financial institutions.

Donaldson, who led the SEC for about 18 months during Bush's administration, repeatedly aligned himself with two Democratic commissioners to adopt new rules regulating hedge funds and mutual funds.

Investors welcomed his activism when the Enron and WorldCom scandals were unfolding, but the business community opposed his initiatives.

Donaldson, the founder of Donaldson, Lufkin & Jenrette and former chief executive of Aetna Inc (AET.N), also helped get the new Sarbanes-Oxley corporate reform law underway and steered an agency crackdown on companies that broke securities rules.