Commissioner — and fierce libertarian — Paul Atkins is slowing some key reforms at the SEC.

When the Securities & Exchange Commission voted behind closed doors late last year to fine Goldman Sachs Group Inc. (GS ) $40 million for allegedly trying to pump up the prices of initial public stock offerings, there was one holdout. Commissioner Paul S. Atkins argued that the penalty was “too high,” according to people with knowledge of the session.

But Atkins didn’t win over fellow commissioners, who ultimately approved the fine. Atkins declined to discuss the settlement, which Goldman accepted without admitting or denying wrongdoing.

It wasn’t the first time that Atkins was out of step. A firm believer in limited government, Atkins has harshly criticized SEC Chairman William H. Donaldson’s drives to regulate hedge funds, force mutual fund boards to have independent chairmen, and promise investors that the best prices will be protected when they buy or sell stock. Behind the scenes, Atkins increasingly balks at the heavy fines that the five-member commission metes out to corporate wrongdoers and wayward executives.

So far he has managed only to slow key elements of Donaldson’s agenda. But his hand is likely to get stronger. President George W. Bush’s reelection and the Republicans’ gains on Capitol Hill give the GOP commissioner — whose term lasts into 2008 — more running room to resist fines and an overhaul of stock-trading rules, a Donaldson priority.

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