JPMorgan's Iksil Said to Take Big Risks Long Before Loss

* Investment bank bet against CIO in derivatives market * Bank said to have discussed merging opposing trade books * Opposing bets could fuel claim JPM is too big to manage

A bunch of current and former JPMorgan Chase executives will head to Capital Hill this morning for a senate hearing on the "London Whale" trade that caused the bank to lose billions last year. 

A trove of trader instant messages (IMs) and conversations from JP Morgan's CIO office are being made public.

LONDON, Jan 16 (Reuters) - JPMorgan Chase & Co has reached an out-of-court settlement over its lawsuit against the former boss of Bruno Iksil, the trader known as the "London Whale" for huge bets he took that cost the bank $6.2 billion, a person familiar with the matter said. Javier Martin-Artajo, who was Iksil's immediate supervisor, had been named as a defendant in a lawsuit filed at London's High Court on Oct. 22.

NEW YORK (Reuters) - The former JPMorgan Chase & Cotrader known as the "London Whale" was not responsible for Lehman Brothers Holdings Inc's bankruptcy and should not be dragged into an $8.6 billion lawsuit accusing the largest U.S. bank of causing it, JPMorgan said.

(Adds other probe details starting in eighth paragraph.)

By Jake Zamansky:Just as the Dow was zooming and booming to record highs Tuesday afternoon, sending Wall Street into fits of joy, JPMorgan CEO Jamie Dimon and the rest of the bank's executive committee were being doused with sobering news.

By CFA Institute: By Ron Rimkus, CFA