The "London whale" trading scandal that forced JP Morgan to book a $6.2 billion loss took a new turn on Wednesday as U.S. authorities announced criminal charges against two of the bank's employees.
But Bruno Iksil, the man dubbed the London whale, was notably absent from the charging documents. Court documents indicate that he will not be charged in exchange for cooperating with authorities.
In a letter to Iksil's attorney, U.S. Attorney General Preet Bharara wrote that Iksil had promptly cooperated with his office. "It is understood that Iksil shall truthfully and completely disclose all information with respect to the activities of himself and others," Bharara wrote.
Iksil, a French citizen, was known as a quiet man who had graduated from one of France's prestigious grandes écoles. He earned his nickname, the Whale, for taking huge risks that surprised other traders but that often paid off. Unlike the stereotype of the bullish trader, Iksil wasn't outsized like his bets and remained elusive, staying beneath the surface.
“Everyone knows The Whale, whenever there was a big move in (credit default swaps) markets, you knew it was the Whale,” one hedge fund manager told Reuters.
The two charged are Javier Martin-Artajo, 49, and Julien Grout, 35. Martin-Artajo and Grout, who worked out of the same office in London, were charged with conspiracy to falsify books and records, wire fraud and falsify Securities and Exchange Commission filings.
A separate SEC court filing alleges that the two fraudulently mismarked investments in a multi-billion dollar portfolio they managed to conceal hundreds of dollars in market losses.
As those losses accelerated to hundreds of millions of dollars by March of 2012, according to the SEC filing, Martin-Artajo instructed Grout to wait for better prices after the close of trading in London, in hopes that they would support more favorable marks.
Martin-Artajo, a resident of England and citizen of Spain, was a high-level director who oversaw the portfolio. Grout reported to him and was a junior trader to Iksil. Grout is a French citizen and moved back to France after he lost his job at JP Morgan, according to the New York Times.
Neither man has been arrested.
The latest development had been expected but still represented a setback for Chief Executive Jamie Dimon's efforts to turn the page on the scandal. JPMorgan declined immediate comment.
NBC's Isolde Raftery contributed to this report.