By Emily Flitter and Matthew Goldstein

NEW YORK (Reuters) - U. S. prosecutors are still looking into events surrounding JPMorgan Chase & Co's "London Whale" trading scandal for potential wrongdoing by the bank itself, according to several people familiar with the probe, in a sign that an expected $700 million civil settlement with regulators on the issue may not end its legal woes.

The criminal probe being conducted by the Federal Bureau of Investigation and federal prosecutors in New York, which has already resulted in fraud charges against two former JPMorgan employees, is looking at the role others at the largest U. S. bank played in its $6.2 billion trading loss, the sources said.

Investigators are piecing together the events that led JPMorgan to restate its 2012 first-quarter earnings and eventually reveal it had suffered the multi-billion dollar loss from oversized bets a group of London-based traders made in an illiquid credit derivatives market, according to the sources.

The two former bank employees, Javier Martin-Artajo and Julien Grout, are charged with trying to hide some of those losses by deliberately giving inaccurate values to those sophisticated securities.

The investigators are focusing on whether people inside the bank had more detailed knowledge about the potential losses than the bank expressed in its early public statements about the matter, the sources said. Authorities also are trying to determine whether Martin-Artajo and Grout and others working with them had felt pressure from above to minimize the losses, the sources said.

The people familiar with the matter said it is too early to say whether any additional charges will arise from the investigation and whether the bank itself will face any criminal liability.

The sources noted that federal prosecutors did not participate in the settlement talks the bank has been holding with the U. S. Securities and Exchange Commission, the Office of the Comptroller of the Currency and the Federal Reserve because the criminal investigation remains open. Those settlement talks are likely to result in JPMorgan paying at least $700 million in penalties.

JPMorgan said it has been truthful in what it has said regarding the events related to the London Whale trade.

"Our senior executives said what they believed to be true at the time," said a bank spokesman, Mark Kornblau.

In a memo to employees on Tuesday, JPMorgan Chief Executive Jamie Dimon said the bank is bracing for more legal and regulatory scrutiny in the coming weeks and months, but outlined a series of steps the company has taken to improve operations.

JPMorgan and Dimon himself have come under fire since last year, when the large, money-losing derivatives trade came to light. Following the "Whale" scandal, Dimon faced a bruising battle with some shareholders to retain his chairman title earlier this year, and has since been under pressure to improve the bank's relationship with regulators.

JPMorgan is also facing probes by various government agencies that are looking into subjects that include possible bribery in hiring practices in China, and potentially fraudulent sales of mortgage securities.

WHALE PROBE

The U. S. attorney in Manhattan, Preet Bharara, at an August press conference where he announced the filing of a criminal complaint against Martin-Artajo and Grout, said his office was continuing to investigate the trading losses. On Monday, a federal grand jury in Manhattan indicted the two former JPMorgan traders.

Martin-Artajo, who supervised the trader Bruno Iksil, nicknamed the London Whale for his enormous derivatives bets, is charged with conspiracy to commit fraud, falsify books and records and make false statements to the SEC. Grout is facing similar charges.

U. S. prosecutors say the two deliberately reported inflated values for Iksil's derivatives positions to try to hide the losses they were suffering from higher-ups in the bank.

Both men are living in Europe and federal authorities hope to extradite them to New York for trial. Martin-Artajo's lawyer recently said he would fight extradition from Spain. Grout's lawyer said in a statement emailed to the press on Tuesday, "We look forward to his vindication."

The ongoing criminal probe leaves JPMorgan in a position similar to the one in which the embattled hedge fund SAC Capital Advisors found itself last spring when it agreed to pay more than $600 million to settle an insider trading case brought by the SEC, only to find itself facing similar criminal charges months later.

Just as with the London Whale regulatory investigation, federal prosecutors did not take part in the settlement talks Steve A. Cohen's SAC Capital had with the SEC.

(Reporting By Emily Flitter and Matthew Goldstein; Editing by Paritosh Bansal and Leslie Adler)

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