A US grand jury has indicted two former JPMorgan traders for allegedly trying to cover up the bank's vast legal losses generated from the 'London Whale' at the Chief Investment Office (CIO).

According to publicly available court papers, Javier Martin-Artajo and Julien Grout are accused of hiding the $6.2bn (£4bn, €4.7bn) loss by marking positions in a credit derivatives portfolio at inflated prices during a certain period of time.

In August this year, Martin-Artajo, who headed up the JPM team that made a series of catastrophic trades, and Grout, who was tasked with recording and distributing daily values on the team's positions, were charged with four counts, including wire fraud, falsifying books and records, making false filings with a US regulator, and conspiracy.

According to the indictment, Martin-Artajo and Grout cooked the books from March to May of 2012 by artificially inflating the value of securities "to hide the true extent of significant losses" incurred by the 'London Whale' trading scandal.

'London Whale' Losses: Civil and Criminal Probes

In May 2012, Bruno Iksil, nicknamed the "London Whale" for his preference for huge trades, and his colleagues at the London unit of JPM's CIO lost billions through bad bets in a portfolio that was specifically designed to hedge the bank's risk exposure.

While the losses were legal, lax risk management controls and traders being encouraged to take increasingly huge risks are largely to blame for how a unit could lose so much money in bad bets.

Meanwhile, JPMorgan is expected to stump up between $700m to $800m in a coordinated settlement, in order to amalgamate several civil investigations by US and UK regulators.

The Securities and Exchange Commission, Federal Reserve, Office of Comptroller of the Currency and the UK's Financial Conduct Authority are all expected to iron out a single settlement with JPM.

However, while the settlement is tipped to be imminent, several unnamed sources cited by Financial Times say that the coordinated deal will exclude the Commodities Futures Trading Commission (CFTC)'s investigation into whether the investment bank manipulated a credit default index known as the IG9.

The appropriate representative at JPM has not returned contact for comment from by IBTimes UK by the time of publication.

The case is U.S. v Martin-Artajo et al, U.S. District Court, Southern District of New York, No. 13-cr-00707.