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In mid-April, Jamie Dimon described reports of problems with JPMorgan's so-called 'London Whale' trade as "a tempest in a teapot."

On Friday, Dimon was singing a very different tune as the firm put losses on the trade at $5.8 billion, with the potential to grow another $1.6 billion in an worst-case scenario.

How this saga went from "tempest in a teapot" in April to one that Dimon now says has "shaken our company to the core," is critical and not yet fully understood, says Eliot Spitzer, former NY Governor and Attorney General, and now host of Viewpoints on Current TV.

To be sure, the losses revealed Friday were not as bad as the worst-case of $9 billion, as reported in The New York Times last month, and JPMorgan (JPM) shares rose sharply Friday.

But the firm also revised down its first-quarter results because "recently discovered information raises questions about the integrity of the trader marks, and suggests that certain individuals may have been seeking to avoid showing the full amount of the losses being incurred."

In other words, traders in JPMorgan's London office were engaged in a cover-up.

As is so often the case, Spitzer says the critical question is: What did Jamie Dimon know about the London Whale losses and when did he know it?

There are "some rumors...perhaps more than that out there that he had more contact with traders in London then we have been led to believe," he says. "I'm not suggesting a massive cover-up but that obviously will be critically important to understanding how he individually responded to this."

Dimon's knowledge of the trades and his response over time is material for several reasons:

• Did Dimon mislead investors when he originally called the trade a 'tempest in a teapot' during the firm's first-quarter earnings conference call in April. (Today, the company restated its first-quarter results to reflect $1.4 billion in related CIO losses.)

• JPMorgan today announced plans to clawback two years of bonuses from executives involved in the trade and those executives will not be eligible for severance. If Dimon knew more about the losses sooner than is currently known, should he and other senior JPM execs be subject to similar "Old Testament"-type punishment?

• Considering Barclays Chairman Marcus Agius and CEO Robert Diamond resigned in the wake of that firm's LIBOR-rigging scandal, it's not unthinkable that Dimon could face further condemnation from JPMorgan's board, shareholders and/or regulators -- although few observers seriously believe he'll lose his job at this juncture.