“TO veterans of Wall Street, the details that emerged in last week’s criminal complaints against two former JPMorgan Chase traders didn’t exactly shock. Over the years, countless traders have misrepresented the values of the securities they hold, hoping that a market move will reverse a looming loss.

“Still, the case against Javier Martin-Artajo and Julien Grout, two of the bank’s traders, has larger lessons for investors and regulators. One has to do with the risks inherent in opaque, over-the-counter markets, where securities’ prices can’t be seen and so can be easily manipulated. Another involves the fairly significant leeway that financial firms have in valuing the securities they trade and hold.

“According to prosecutors in the Southern District of New York, Mr. Martin-Artajo and Mr. Grout hid or understated losses in credit derivatives trades held by JPMorgan’s chief investment office during 2012.

“Lawyers for both men say that they did nothing wrong and would be exonerated.

“But the complaints against both men, laced with e-mails and transcripts of phone calls, indicate that the traders ignored the bank’s protocol for valuing the complex bets and chose instead to mark them in a way that would mask and minimize ballooning losses.

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“When the traders went against them, the men deviated from that procedure to cover up some of the losses, prosecutors said.”

“’None of these trades were done on an exchange or exchangelike platform,’ said Dennis Kelleher, president of Better Markets, a nonprofit organization that promotes the public’s interest in financial markets. ‘That’s how they were allowed to do two things — one, build up such a huge position with no one knowing and, two, misprice the securities.’”

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