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a. Which of the theoretical perspectives of regulation reviewed in this chapter might best explain the existence of laws that prohibit insider trading? The ‘pro-regulation’ perspective Regulators often use the ‘ level playing-field’ argument to justify putting legislation in place. From a financial accounting perspective, everybody should (on the basis of fairness) have access to the same information. This is the basis of laws that prohibit insider trading, which rely upon an acceptance of the view that there will not be, perhaps should not be, transfers of wealth between those parties that have access to information and those that do not.
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