One of the most relied upon federal laws is the anti-fraud prohibition of the Exchange Act. This prohibition, commonly referred to as Rule 10(b)-5, makes it unlawful for anyone, directly or indirectly, to engage in any act, practice, or course of business that operates, or would operate as a fraud or deceit upon anyone in connection with the purchase or sale of any security. It is used against many types of fraudulent conduct, including "insider trading. " This occurs when a director or officer (or other insiders) buys or sells stock in a publicly traded company based on material, non-public information.

Corporate officers and directors are also subject to criminal and civil penalties under state law. Criminal laws of general applicability, such as larceny, are used against corporate directors and officers who wrongfully obtain or withhold property with the intent to deprive someone of it or appropriate it for them or someone else. Larceny includes embezzlement, obtaining property by false pretense, and obtaining property by false promise. The penalty generally depends on the value of the property taken with a maximum penalty of 20 years in prison. Another example of a generally applicable crime is forgery, which includes issuing forged stock, bonds, or other instruments representing interests or claims against a corporate or other organization or its property. The maximum penalty is 10 years in prison. A third example is making a false statement in the second degree, which involves making a false written statement in a statutorily authorized or required form to a public official in the performance of the official's duties. The maximum penalty is a year in prison.