The “London Whale” may have escaped prosecution – at least for now – but two of his former colleagues at JPMorgan Chase face federal charges and sanctions by the Securities and Exchange Commission.

Javier Martin-Artajo and Julien G. Grout, two former traders at JPMorgan Chase & Co., are accused of fraudulently mismarking investments in a multi-billion dollar portfolio they managed, known as the Synthetic Credit Portfolio (SCP), in order to conceal hundreds of millions of dollars in mark-to-market losses. They are also accused on knowingly making false statements in reports and documents filed with the SEC.

The charges are related to massive losses blamed in large part on Bruno Iksil, a trader who earned his nickname from the size of the trades he orchestrated at JPMorgan Chase's Chief Investment Office (CIO), an arm that managed approximately $350 billion.

The U.S. government alleges that over the course of the first quarter of 2012, the CIO used the SCP to engage in high-risk derivatives trading. A 300-page report issued in March by the Senate's Permanent Subcommittee on Investigations found evidence that traders mis-marked the trading book to hide losses; disregarded multiple indicators of increasing risk; manipulated risk models; dodged regulatory oversight; and misinformed investors, regulators, and the public about the nature of its risky derivatives trading. The portfolio eventually lost more than $6 billion.

Iksil reportedly cut a deal with U.S. prosecutors in exchange for assisting with ongoing investigations and prosecutions. On Wednesday, it was announced that Martin-Artajo and Grout were charged in federal criminal complaints with conspiracy to commit wire fraud, and falsifying company records and Securities and Exchange Commission filings.

A separate civil complaint issued by the SEC details the problematic actions of Martin-Artajo and Grout. The former, a managing director for JPMorgan's CIO, was responsible for overseeing the SCP. Grout was a vice president in the CIO's office in London.

In early 2012, due to improving credit markets and a changed investment strategy, the value of the SCP's investments began to decline. In March 2012, when the decline accelerated, the two began to fraudulently mark the SCP's investments to conceal the true extent of losses from JPMorgan management.

On April 10, 2012, the portfolio declined in market value by hundreds of millions of dollars. Nevertheless, Martin-Artajo directed Grout to disclose to management only $5.7 million in daily mark-to-market losses—a figure ultimately replaced with a much larger loss of $395 million. On April 13, 2012, JPMorgan reported its results for the first quarter of 2012 and, due to the misconduct of the defendants, overstated its consolidated income by hundreds of millions of dollars.