How the Trump Enforcement Numbers Were Calculated

To assess the Trump administration’s record in punishing corporate malfeasance during its first 20 months compared with the final 20 months of the Obama administration, The New York Times analyzed thousands of actions filed by the two most powerful agencies that police this arena: the Securities and Exchange Commission and the Justice Department.

The methodologies used by The Times were reviewed by academic and legal experts who regularly track the activities of the two agencies, including former employees at both the S.E.C. and the Justice Department during Republican and Democratic administrations.

The Times created a database of enforcement actions filed during the 40 months. The database covered the 2,158 stand-alone enforcement actions initiated from May 18, 2015, through Sept. 30, 2018, the end of the federal government’s most recent fiscal year. The case list was compiled before the release on Friday of the S.E.C.’s annual enforcement report.

The Times also tagged cases involving public-company defendants and banks as a measure of major cases against prominent defendants.

A defendant was classified as a bank if it, or its parent company, met any of the following criteria: It appeared on the Federal Reserve’s list of “Large Commercial Banks”; it appeared on the federal list of “Holding Companies With Assets Greater Than $10 Billion”; it was licensed as a bank by the Office of the Comptroller of the Currency or the New York State Department of Financial Services; or it had the word “bank” in its name.

A defendant was classified as a public company based on data published by Cornerstone Research, a litigation research firm, and New York University’s SEED project, which maintains a database of S.E.C. enforcement actions against public companies.

To determine whether financial penalties increased or decreased between administrations, The Times analyzed data using several methodologies, all of which showed a drop under President Trump.

The primary methodology focused on penalties that defendants were ordered to pay as a result of an S.E.C. enforcement action initiated during that administration, excluding payments to other government agencies.

As such, cases initiated before Jan. 23 last year were credited to the Obama-era S.E.C., regardless of when they were settled, while cases initiated on or after that date were credited to the Trump-era S.E.C.

A second methodology measured only cases that were simultaneously announced and settled, meaning the Obama totals did not include cases that were challenged by defendants and settled later under Mr. Trump.

For another approach, Urska Velikonja, a professor at Georgetown University Law Center who has compiled many years of S.E.C. penalty data, replicated, as close as possible, the S.E.C.’s approach to measuring enforcement. This approach is based on when cases were settled, not when they were filed, and also includes money paid to government agencies other than the S.E.C., including overseas.

The S.E.C. rejected The Times’s approach, saying it would have been more appropriate to have compared the first 20 months of the Trump administration with either the first 20 months of the Obama era or the second Obama term. That comparison would show more cases filed under the Trump period, the agency said.

The Times focused on penalties, not case totals, however. And it did not look at the first months of the Obama administration because the agency was in turmoil after the financial crisis, whereas the final months represented the agency Mr. Trump was inheriting.

To peruse the Times case data, click here.

The Times asked the Legal Data Lab at the University of Virginia School of Law and Duke Law School, which maintains a registry of corporate criminal prosecutions, to analyze all such cases filed in the first 20 months of the Trump administration and compare them with those filed in the first and last 20 months of the Obama White House. The analysis reflects sums paid to federal prosecutions, whether in fines, restitution or forfeiture. It does not reflect sums paid to civil regulators or state or foreign enforcers.

The Times also analyzed civil fraud actions against financial institutions, based on a list of such cases that the law firm Buckley Sandler compiled from public announcements. The Justice Department has two primary methods for pursuing such cases, which require a lower burden of proof than criminal cases: the False Claims Act and the Financial Institutions Reform, Recovery and Enforcement Act.

Analysis of enforcement activity by the Commodity Futures Trading Commission was based on data provided by the commission.

Public Citizen, a left-leaning oversight group, published a report in July that examined enforcement at other agencies. The report was based on data from the Corporate Research Project, a nonprofit group whose Violation Tracker records enforcement actions across the federal government.

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