Most of the laws covering this are state laws.
In Texas if a seller sells a home or an agent sells a home and doesn't disclose all knowledge they have about condition problems then the seller or agent could possibly be sued for "triple damages".
It is called a consumer protection law and was originally designed to go after manufactors of goods. There is a whole system of things we do as a company to help the buyer (and also to protect ourselves and the seller from possible lawsuits).
We have the seller disclose in writting on the proper forms everything they know about the house and have the buyer sign it showing that they have receieved it. (If the seller does not disclose something that we know then we refuse to take the listing).
We encourage the buyer (in writting, requiring the buyer to sign acknowledging that we have encouraged him) to hire a professional home inspector and to attend the home inspection personally.
We encorage the seller to provide and encourage the buyer to request a home service policy (often called a home warranty).
Going back to your question, it is often true that the agent doesn't know much about the condition of the house. The normal person to get sued (punished) is the seller.