The sign says:
No Smoking
Prohibited By Law
But it should say:
No Smoking
By Law
or
Smoking Prohibited By Law
or
No Smoking
Smoking Is Prohibited By Law
Why? Because it almost sounds as if not smoking is not allowed. In other words, it sounds like everyone must smoke.
Obviously people are not really going to conclude that they must smoke when they see this sign, but all the same, the English is not quite right.