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Two Charged in J.P. Morgan ‘Whale’ Trades

Criminal charges were filed Wednesday against two former J.P. Morgan ChaseJPM +0.39% & Co. traders who were at the center of a series of bad bets that cost the nation’s largest bank more than $6 billion in losses.

U.S. prosecutors charged Javier Martin-Artajo, a Spaniard who was in charge of the team that made the giant wagers in corporate credit investments that piled up losses early in 2012, and Julien Grout, a Frenchman who was responsible for recording and distributing daily values on the positions.

Lawyers for Messrs. Martin-Artajo and Grout could not immediately be reached for comment.

Bruno Iksil, a Frenchman who executed the trades and who was known as the “London whale,” wasn’t expected to be charged, said people close to the case.

The developments mark the beginning of an effort to unmask exactly who was responsible for the trading fiasco as it unfolded inside a London outpost of the bank’s Chief Investment Office.

According to charging documents made public Wednesday in federal court in Manhattan, Messrs. Martin-Artajo and Grout were charged with wire fraud, making false filings with the Securities and Exchange Commission, as well as conspiracy to falsify books and records, to commit wire fraud and to falsify filings.

J.P. Morgan has argued that a small group of traders was largely responsible for the mess, which generated big trading losses early in 2012. It isn’t clear whether prosecutors expect to bring charges against others, or have concluded that more-senior executives did nothing wrong.

J.P. Morgan declined comment.

Preet Bharara, the U.S. attorney in Manhattan, was expected to discuss the charges in greater detail on Wednesday afternoon.

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