Which legal sources govern fraud cases?

• A. Circulars, executive orders, and opinions
• B. Statutes (criminal and civil), case law (precedents), regulatory guidance and standards; agency rules
• C. International treaties only
• D. Company policies and internal memos only

Answer: (B)

The main idea here is that fraud cases are built from a mix of formal legal authorities that create, interpret, and enforce the law. Statutes establish criminal offenses and civil liabilities related to fraud, giving the rules that must be followed and the penalties for violations. Case law then interprets those statutes, shaping how elements like intent, deception, and harm are proven in different fact patterns and setting precedents for future cases. Regulatory guidance and standards, along with agency rules, translate statutes into practical rules for enforcement, investigation, and compliance, showing how agencies expect conduct to meet legal requirements and what standards must be met. International treaties matter only if a country has implemented them into domestic law, so they’re not the broad governing source on fraud by themselves. Internal company policies and memos aren’t controlling law in the courts, though they can reflect best practices or be used as evidence of a party’s conduct.

That combination—statutes, case law, regulatory guidance and standards, and agency rules—best explains the legal framework governing fraud cases.