Remember last spring when the Securities and Exchange Commission announced that it was suing Goldman Sachs over allegedly misleading an investor in conjunction with a synthetic collateralized debt obligation? It looks like the agency's CDO inquiries are continuing, and JPMorgan is on its hit list. The regulator is investigating a $1.1 billion deal the bank sold. But does the SEC have astrong enough case to prosecute, or is it just throwing everything it can at Wall Street to see what will stick? Here's Jean Eaglesham and Dan Fitzpatrick from the Wall Street Journal with a tidbit that suggests the latter:

J.P. Morgan Chase, which retained a significant stake in the Squared CDO, lost almost $900 million on the deal--more than the combined losses of all its clients on the deal, a person familiar with the deal said.

If JPMorgan did worse than all of its other clients combined, but mislead them to try to make a profit, then it failed pretty miserably. If the bank ate more of its cooking than anyone else, it's hard to see how the SEC could blame it for trying to trick investors into buying a bad bond. But perhaps we'll learn more in the coming weeks, if the SEC proceeds.

Read the full story at the Wall Street Journal.

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