Representatives for the F.B.I. and the United States Attorney's office in Manhattan declined to comment.
The losses at the heart of the case stemmed from outsize wagers made by the traders at JPMorgan's chief investment office in London. The losses, which JPMorgan initially disclosed last May, have since reached more than $6 billion.
After more than a year of gathering evidence about the bet, a blunder that set off a cascade of scrutiny across two continents, federal prosecutors and the F.B.I. in Manhattan have concluded that the two employees lowballed losses as the trades spiraled out of control. Poring over internal e-mails and phone recordings that shine a light on how the traders valued their bets, authorities came to believe that Mr. Martin-Artajo directed Mr. Grout to falsify records and obscure more than $400 million in losses from their bosses in New York, say the people briefed on the matter, who spoke on the condition of anonymity.
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The charges hinge on the cooperation of another JPMorgan trader, Bruno Iksil, who was nicknamed the London Whale because of his role in the unusually large bet. Despite initially personifying the the trade — the blowup is referred to colloquially as "the London Whale" — some investigators concluded that he was unfairly blamed.
After giving multiple interviews to authorities, first at a meeting in Brussels and then New York, Mr. Iksil secured a cooperation agreement from the government. It is unclear, however, whether he will face separate charges.
The government, lawyers note, will face challenges in the courtroom. For one, Wall Street cases are unusually difficult to prove to jurors who must grapple with financial jargon and complex fact patterns.
That hurdle is particularly high in this case, which centers on the vagaries of rules that even seasoned Wall Street employees struggle to interpret. Under the rules, traders have leeway to value their losses on derivatives contracts because actual prices may not be readily available, presenting a challenge to prosecutors who must prove that employees intentionally cloaked the losses.
While authorities are not pursuing charges against JPMorgan's top executives, according to the people briefed on the matter, the bank is nonetheless bracing for civil charges from regulators. The Securities and Exchange Commission, which is expected to cite the bank for lax controls that allowed the traders to undervalue the value of the bets, could strike a settlement with the bank as soon as this fall. The Financial Conduct Authority, a British regulator, also plans to fine the bank in the coming months, one person said.
In an unusually aggressive move, the S.E.C. is seeking to extract an admission of wrongdoing from the nation's biggest bank. If JPMorgan concedes to that demand, such an admission would reverse a longtime practice at the S.E.C., which allowed defendants for decades to "neither admit nor deny wrongdoing." A pact could come as soon as this fall, according to people briefed on the case, who added that the agency had not threatened to charge JPMorgan executives.
Last July, the bank restated its first-quarter 2012 earnings downward by $459 million, conceding errors in the valuations.
"We questioned the integrity of those trader marks," Douglas Braunstein, then the bank's chief financial officer, said at the time.
