The story of the banks that created investments and then bet against them has reached a particularly unedifying stage.

Every day seems to bring anotherheadline about a bank or hedge fund that is "under investigation" by one authority or another. Such stories can be built around a wispy fact or two. They typically feature indignant denials and lots of caveats, and are often sourced to the always-revealing "people familiar with the case." (For a run-down of the stories, see our just-published Bank Investigations Cheat Sheet.)  

To be fair, this is honest journalistic labor. I've done it as a reporter in Washington, and we're doing a bit of it ourselves right now on several stories, from Wall Street to New Orleans. Without doubt, there are moments when the mere fact that there is an investigation is worth noting, particularly if the principal figure is a leading financial institution or a public official.

But we should all be aware that this work is particularly subject to pitfalls. Stories about investigations often leave the impression that authorities are running full tilt at malefactors. And they often fail to answer basic questions. Are these investigations fishing expeditions? Pro forma reviews? The first steps toward significant charges?

There are good reasons for the lack of clarity. First, the investigators themselves don't always know where they're going. Investigators also have little reason to telegraph what they're doing to journalists, and they're usually tight-lipped in the early phases of their inquiries. (Occasionally, prosecutors do provide information to the press in hopes of rattling their targets or pressuring people to cooperate. That's more the exception than the rule.)

Usually, reporters are left interviewing the witnesses, their lawyers and their various associates, from business partners to significant others. If a federal official asks someone on Wall Street pointed questions about a particular investment put together by a big bank, then a reporter might write a story saying officials have begun an investigation. Procedurally, such inquiries begin as "preliminary" investigations. This could ultimately lead to an actual investigation that could eventually result in criminal charges. Or not.

Over time, such stories have had a mixed track record. Some ultimately explode into significant cases, such as the insider trading scandal that erupted recently on Wall Street. Others fizzle.

One case I covered in the 1980s involved Raymond Donovan, labor secretary under President Ronald Reagan, and an executive at a New Jersey construction company. Donovan was "under investigation" from the beginning of his term and was eventually indicted. At trial, however, he was acquitted, prompting him to ask this famous question:

"Which office do I go to to get my reputation back?"

All this might make one wonder why reporters would risk writing stories about investigations that barely exist or about which they have the most rudimentary understanding.

The answer, which has existed through centuries of journalistic history, is competition. When I was at The New York Times, a friend on a rival newspaper said he felt a daily imperative to put the shards of information he was learning into print or else see them in competitors' stories. It was, he said, a matter of "Write it or read it."

With anyone now able to publish at any time, those pressures have only intensified for all of us.

Investigative reporting broadly divides into two categories. We prefer to do original stories in which we research by gathering documents and exclusive interviews. Our hope is that such work will prompt investigators to take a closer look at issues like police shootings in New Orleans.

But sometimes "investigating the investigators" can be worthwhile, pitfalls and all. An indictment or a reported inquiry certainly can launch a vein of original reporting. I once initiated a wide-ranging and revealing examination of former New Jersey Senator Robert Torricelli because prosecutors brought charges against an obscure campaign contributor.

But stories that result from investigating the investigators can leave readers without the full picture. My advice: When the journalistic scrum forms around an investigation, read very carefully and withhold final judgments.