You asked for a summary of federal and state civil and criminal liability that corporate officers and directors are subject to.

SUMMARY

The principle areas of civil and criminal liability corporate officers and directors face involve fraud and other misconduct in connection with buying or selling securities, and in conducting the corporation's business. For the most part, state and federal jurisdiction overlap. Federal jurisdiction depends on a connection with interstate commerce. But this is not much of an impediment since most transactions involve, to some extent at least, the use of a phone, computer, or some other instrumentality of interstate commerce.

Federal criminal penalties of general applicability are substantial, especially in light of legislation Congress enacted during the past few months. For example, a corporate director or officer commits mail fraud if he intentionally participates in a scheme to defraud someone of money or property and uses mail or interstate wire communications to do so. The penalty is imprisonment for up to 20 years and a fine of up to $ 250,000. Other federal crimes of general applicability include bank fraud, conspiracy to commit a federal offense, fraud and false statements in connection with matters within the federal government's jurisdiction, destruction or falsification of records in connection with federal

investigations, attempts and conspiracies to commit criminal fraud offenses, tampering with a record or otherwise impeding an official proceeding, and health care fraud,.

In addition, corporate officers and directors are also subject to federal laws that explicitly regulate the initial and subsequent sale of securities by publicly traded companies. The two principal federal securities laws are the Securities Act of 1933 and the Securities Exchange Act of 1934. The Securities Act deals primarily with the initial issuance of securities, and the Exchange Act regulates trading in securities after their initial issue. Congress has authorized the Securities and Exchange Commission (SEC) to enforce these laws. Corporate directors, officers, and others who violate these laws are subject to criminal penalties, administrative fines, civil penalties, cease and desist orders, injunctions, disgorgement (an equitable remedy to provide restitution to defrauded members of the public), private lawsuits, and orders barring them from acting as officers or directors of public companies.