2. The following was taken from the Securities Exchange Act of 1934, Section 10, amended as of January 3, 2012:

It shall be unlawful for any person, directly or indirectly, by the use of any means or instrumentality of interstate commerce or of the mails, or of any facility of any national securities exchange. . .. To use or employ, in connection with the purchase or sale of any security registered on a national securities exchange or any security not so registered, or any securities-based swap agreement, any manipulative or deceptive device or contrivance in contravention of such rules and regulations as the Commission may prescribe as necessary or appropriate in the public interest or for the protection of investors.

This rule has been used as a basis to prosecute insider trading activity. Describe how regulator reliance on this rule might characterize an example of “principles-based”

regulation in the United States.