Two former JP Morgan Chase & Co. employees were indicted for engaging in a scheme to hide trading losses worth USD6.2 billion on wrong-way derivatives bets last year.

Javier Martin-Artajo and Julien Grout were named in a federal indictment yesterday in a court in Manhattan. The US announced the charges against the men last August. Martin-Artajo worked to oversee trading strategy for the synthetic portfolio at the London based bank's chief investment office. Julien Grout was the trader who worked for Martin-Artajo.

Both men were charged yesterday with five criminal counts. This included conspiracy, securities fraud, wire fraud, making false filling with the US Securities and Exchange Commission and filing false books and records. The pair along with other unnamed co-conspirators were accused of engaging in a scheme to manipulate and inflate the position markings' value in the synthetic credit portfolio (SCP). The US alleged indictment said, "The two manipulated and inflated the value of position markings in the Synthetic Credit Portfolio in order to achieve specific daily and month-end profit and loss objectives. In other words, they artificially increased the marked value of securities in order to hide the true extent of significant losses in that trading portfolio."