A January analysis by the law firm Morgan Lewis found that S.E.C. penalties have dropped by a “staggering degree” and that “the numbers suggest a philosophical shift by the Cox commission in what constitutes an appropriate penalty.”

A spokesperson for the S.E.C., in an email statement, insists that “by any objective measure, the S.E.C.’s enforcement division has never been more effective or enjoyed greater support from the commission. The commission’s unparalleled support has brought unparalleled results from investors.”

While major cases were bogged down, commissioners quickly approved minor ones involving penny stocks, boiler-room operators, and Ponzi schemers who fleeced groups of small investors. According to former S.E.C. officials, this apparent shift in agenda was pushed in large measure by former commissioner Atkins, who stepped down in August after his term expired. One former S.E.C. official claims to have heard Atkins remark that he believed that the S.E.C. was “unconstitutionally constituted.” Atkins denies this, saying that if he had believed the S.E.C. was unconstitutional, he would not have served on the commission. But a friend of Atkins’ says, “If you surprised Paul and asked him what he really thinks of the S.E.C., he’d probably say, ‘Blow it up.’ ”

Atkins, whom one former commissioner describes as “probably the most effective commissioner in the history of the S.E.C.,” benefited from Cox’s desire to build consensus. Cox shunned divided votes, delaying important matters until he could engineer a majority. Atkins wasn’t inclined to compromise. He castigated the enforcement division in speeches around the country and filed detailed public dissents in response to some of the agency’s decisions.

Atkins says the push against small-scale fraud cases has not come at the expense of large investigations. He suggests that by emphasizing such efforts, the S.E.C. adopted a strategy similar to one that former New York mayor Rudy Giuliani employed to reduce the city’s crime rate—cracking down on quality-of-life offenses and securing arrests for minor violations. “You have to concentrate on the muggings and graffiti because that builds up respect for the rule of law,” Atkins says.

But demoralized staffers don’t agree. In one instance, after commissioners had approved penalties in a microcap fraud case, Atkins says an enforcement lawyer came up to the colleague who had conducted the investigation, slapped him on the back, and said sarcastically, “Congratulations on your small case.”