On Thursday, JPMorgan Chase announced that it has lost nearly $2 billion in securities trades gone bad, a revelation that sent investors scrambling, made an SEC investigation public and renewed calls to tighten banking regulations.

Here's how the financial giant explained things in its 10-k filing: “Since March 31, 2012, CIO [Chief Investment Office] has had significant mark-to-market losses in its synthetic credit portfolio, and this portfolio has proven to be riskier, more volatile and less effective as an economic hedge than the Firm previously believed… The Firm is currently repositioning CIO's synthetic credit portfolio, which it is doing in conjunction with its assessment of the Firm's overall credit exposure.”

Translation: Learning little from the financial crisis, it gambled on corporate bond derivatives not directly backed by any real assets.

In the aftermath, the New York Times has reported, citing unnamed SEC officials, that a "preliminary investigation" of possible “civil violations” was already underway even prior to the public bombshell. That investigation is likely to focus on accounting and disclosure issues. The latter could look at whether the losses, which mounted in recent weeks, were disclosed to investors soon enough. The former is likely to look at the metric JPMorgan Chase used to determine risk.

“I think it's safe to say that all the regulators are focused on this,” SEC Chairwoman Mary Schapiro was widely quoted as saying on Friday.

In a statement issued on Friday, U.S. Rep Barney Frank, ranking Member of the House Financial Services Committee, said the news "obviously goes counter to the bank's narrative blaming excessive regulation for the woes of financial institutions.”

The 2010 Wall Street Reform and Consumer Protection Act includes language, referred to as the Volcker Rule, which would force large financial institutions to restrict proprietary trading. 

Frank cited JPMorgan Chase's assertion that complying with the new rules will cost $400 to $600 million at the outset.

“In other words, JPMorgan Chase, entirely without any help from the government has lost, in this one set of transactions, five times the amount they claim financial regulation is costing them,” he said. “The argument that financial institutions do not need the new rules to help them avoid the irresponsible actions that led to the crisis of 2008 is at least $2 billion harder to make today."