What ethical frameworks guide private equity firms in using regulatory arbitrage for offshore investments without enabling systemic risk?

Regulatory arbitrage—exploiting loopholes like offshore hubs or instrument substitution—is legal but ethically fraught, as seen in the 2008 crisis . PE firms often use these strategies to cut costs, but risk backlash if seen as undermining global regulations. How do they draw lines? For example, is shifting profits to the Cayman Islands acceptable, but using total return swaps to avoid disclosure not? I need examples of internal ethical committees or third-party audits that assess arbitrage tactics, and how firms communicate these choices to LPs concerned about reputational and systemic risks.