JP Morgan Chase accepted a “crisis management” award at an event Thursday night that rewarded the bank for the way it handled the London Whale trading crisis that cost the bank at least $6 billion. The trade set the financial world ablaze when the firm’s chief executive, Jamie Dimon, announced it, considering JP Morgan had been the strongest megabank throughout the financial crisis and Dimon often bragged of its “fortress balance sheet.”

But the firm handled the crisis with flying colors, at least according to award presenters, the Wall Street Journal reports:

“J.P. Morgan Chase is winning for its handling of the $6.2 billion trading loss by the London Whale last year,” the event’s host, CNN anchor Ali Velshi, said. “I would say that’s what you call making lemonade out of lemons.”

Kathy Hu, an executive director in J.P. Morgan’s investor relations department, accepted the award and quipped: “Can I just say, ‘Crisis? What crisis?’”

The United States Senate took a slightly different view. In a bipartisan report from the Senate Permanent Subcommittee on Investigations issued last week, senators blasted the bank for misleading regulators and sidestepping regulations that should have banned the type of trades that kept the loss from occurring.

JP Morgan has been among the fiercest lobbyists against regulations like the Volcker Rule, which was meant to keep financial institutions that have the backing of taxpayers from engaging in risky forms of trading that result in large losses that could pose a risk to the overall economy. As U.S. News and World Report’s Pat Garofalo explained, this should have been a lesson in why the Dodd-Frank Wall Street Reform Act and the rules it contains should be strengthened. Instead, it won JP Morgan an award.

The risky “London Whale” trading loss JP Morgan Chase reported last May was the result of a risky proprietary trade that should be banned by the Volcker Rule, a bipartisan Senate report alleged Thursday. The Volcker Rule would ban most proprietary trading, which is done with a bank’s own money only to turn profit, at financial institutions that have taxpayer backing.

When he announced the loss, which now amounts to more than $6 billion, JP Morgan CEO Jamie Dimon said the trade was a “hedge” and not a prop trade. As such, Dimon said, a stronger Volcker Rule would not have prevented the bank from engaging in the trade. But that was not the case, both Republican and Democratic senators said in the report, as Bloomberg reports:

“JPMorgan’s chief investment office increased risk by mislabeling the synthetic portfolio as a risk-reducing hedge when it was really involved in proprietary trading,” said Senator John McCain of Arizona, the panel’s top Republican.

Sen. Carl Levin (D-MI), the Permanent Subcommittee on Investigations’ chairman and a co-author of the Volcker Rule, said the Senate would work to close a loophole in the rule that may allow “portfolio hedges” similar to what JP Morgan attempted. At the time of the loss, Levin said the rule had a loophole wide enough “a Mack truck could drive right through it.”

Many of the loopholes in the rule, which is not yet finalized, may have resulted from JP Morgan’s lobbying. Dimon has been a vocal opponent of the rule, broadly considered the most contentious piece of the Dodd-Frank Wall Street Reform Act, and JP Morgan and other banks lobbied against it both before and after Dodd-Frank passed. A host of former bankers have announced support for the rule and said it was necessary for financial stability, but the rule was watered down significantly, so much so that its namesake, former Federal Reserve chairman Paul Volcker, said he was no longer satisfied with it.

The committee will hold a hearing on the trading loss today. The JP Morgan official who ran the unit that oversaw the massive loss is scheduled to testify.

The European economy is still struggling to recover from the Great Recession as its leaders have chosen to focus on deficits and debt instead of unemployment and growth. But at a speech in Miami, JP Morgan Chase CEO Jamie Dimon seemingly ignored the struggling European economies and praised leaders there for having a “will” to cut deficits that the United States doesn’t yet have:

DIMON: What I’ll say about Europe is they have the will. Listen to their politicians. Their politicians say, “There is no Plan B. The Euro will not be dissolved.” The way is very complicated and will take many years. The United States is the opposite. We know exactly the way. It’s something called like a Simpson-Bowles, we’ve seen a lot of different plans come out. We don’t yet have the will. The United States is a far simpler problem.

The “will” European leaders have is one that has wreaked havoc on the continent’s economy. The mad dash to cut deficits and debts has pushed country after country into recession, and the Eurozone itself slipped back into a recession in November. Eurozone unemployment reached a record-high of 11.8 percent in January, and 18.8 million Europeans remain unemployed. In Spain, unemployment rose above 26 percent at the end of 2012, and 56 percent of young workers are unemployed. Britain is on the brink of a triple-dip recession, and its lack of growth has thwarted its deficit-reduction efforts. Greece’s unemployment rate is 26.8 percent. Even Germany, the stalwart European economy, is experiencing a slowdown.

The United States, meanwhile, took a different approach, choosing to spend nearly a trillion dollars to stimulate the economy. As a result, America has outpaced Europe since the Great Recession. Still, unemployment remains unbearably high and growth slower than it should be, and efforts to reduce the debt and deficits are only complicating the recovery.

One of the prime drivers of income inequality has been the ever-increasing amount paid to both CEOs and workers in the financial industry. In fact, according to the Economic Policy Institute, “Executives, and workers in finance, accounted for 58 percent of the expansion of income for the top 1 percent and 67 percent of the increase in income for the top 0.1 percent from 1979 to 2005.”

However, Jamie Dimon, CEO of JP Morgan Chase, America’s largest bank, doesn’t believe Wall Street pay has anything to do with growing inequality. Furthermore, he thinks efforts to realign the bad incentives in Wall Street compensation will turn the United States into communist Cuba:

DIMON: I don’t like the fact that we have an increase in inequality in the United States. But you better be very careful if you say we’re having that because I paid that person properly. All of you have the right to say ‘I want to be paid what I’m worth in the market.’ That’s perfectly fair…We all want an equitable society. We need to have a conversation about what makes it equitable. You can go do it the way that Cuba tried. Okay, well, then it will be equitable but everyone won’t have much. So you’ve got to be very thoughtful how you go about it. So I don’t see people say ‘I want inequity.’ I don’t want to make more money if everyone else makes less. We want to lift society up so everyone’s better off. That does not mean that people don’t have to pay people what they’re competitively worth. If you don’t want a free society then start dictating what compensation can be.

Watch it:

As a recent study in the Quarterly Journal of Economics showed, banker pay skyrocketed after the deregulation of the 1980s and 1990s, and also became “riskier and more backloaded.” And even some Wall Street heavywights have started to push back against outsized compensation. “I think the kind of money that’s made and the way it was flaunted — look it’s wrong. [...] The money was really unbelievably generous, to say the right word,” said former Morgan Stanley CEO John Mack.

The problem with ever-growing pay is not only that it contributes to income inequality (and often bears no relation to the success of the firm, as evidenced by former Citigroup CEO Vikram Pandit receiving $260 million to run his bank into the ground). Wall Street pay can also put the whole economy in trouble, if the incentives are to take huge risks that end up putting a systemically significant bank at the edge of collapse. Hence, the Dodd-Frank financial reform law gives the Federal Reserve the power to veto pay packages that might cause such a situation.

A recently hired economic policy director for Mitt Romney’s presidential campaign was a top lobbyist for JP Morgan Chase, Wall Street’s biggest bank, and federal documents show that he lobbied Congress and federal regulators this year on issues ranging from the implementation of new financial regulations to corporate tax reform.

Pierce Scranton, who became Romney’s economic policy director in August, is listed as JP Morgan’s executive director of the bank’s lobbying department on public federal documents filed in 2012. Those documents show that between January and July of this year, Scranton oversaw lobbying activities on a host of economic issues, including legislation dealing with home mortgage modifications and foreclosures, Chinese trade and currency manipulation, the implementation of the Dodd-Frank Wall Street Reform Act and other financial regulations, the Jumpstart Our Small Businesses (JOBS) Act, and corporate tax reform.

Scranton, according to the documents, lobbied Congress and federal regulatory agencies on legislation regarding the “implementation of the Dodd-Frank Act.” Scranton and JP Morgan, at the time, were lobbying for a loophole in a regulation that limited risky trading; months later, the bank lost billions of dollars on risky trades that would be prohibited without such a loophole. Scranton lobbied on four pieces of legislation dealing with Dodd-Frank’s regulation of the derivatives market, according to the documents. He also met with Treasury officials in January of 2011 regarding Dodd-Frank, according to the Sunlight Foundation.

JP Morgan has been an ardent opponent of many of the rules contained in Dodd-Frank, including the regulation of the derivatives market. JP Morgan has spent nearly $10 million lobbying since the beginning of 2011, much of it aimed at Dodd-Frank and regulations it includes.

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JP Morgan Chase, the largest American bank, announced record third-quarter profits today of $5.7 billion. Those billions were made even as the bank is still working out the multi-billion dollar “London Whale” trading debacle.

But to hear JP Morgan Chase CEO Jamie Dimon tell it, regulations are killing his bank. During an appearance in Washington this week, Dimon opined that new regulations — both on the international level and due to the Dodd-Frank financial reform law here in the U.S. — will cost JP Morgan $1 billion per year (compared to quarterly profits of nearly $6 billion). As McClatchy’s Kevin Hall reported:

Dimon said he understands the need for regulation in the wake of crisis.

“But I think government should think twice before it punishes businesses every time something goes wrong,” he said, looking past the scale of what went wrong in the run up to the worst financial crisis since the Great Depression.

Dimon repeated that he supports much of what’s in the Dodd-Frank Act, the sweeping 2010 revamp of financial regulation that was a response to the crisis, but he took issue with some of its most important provisions. One is regulatory requirements to keep more capital on hand to respond to future crises, which he argued crimps lending and investment.

JP Morgan Chase and Dimon are certainly not alone. The nation’s six biggest banks are enjoying their highest profits since 2006, but that hasn’t stopped bankers from moaning about new regulations, even as the country still recovers from a financial crisis that was largely the result of Wall Street malfeasance.

New York Attorney General Eric Schneiderman (D) has filed a civil lawsuit against JP Morgan Chase alleging “widespread fraud in the sale of mortgage-backed securities,” the Wall Street Journal reports. The suit is the first action brought by the Obama administration’s mortgage fraud task force, which Schneiderman chairs.

The residential mortgage-backed securities (RMBS) in question were actually tied to Bear Stearns, the failed financial institution that JP Morgan acquired before the 2008 financial crisis.

According to the suit, filed in New York state court, the bank was “aware that many of their loan originators were selling defective loans but continued to buy and securitize those loans,” and, similarly to the “shitty deals” peddled by Goldman Sachs bankers, had openly touted the bad packages they were selling:

Other internal communications reflect Defendants’ awareness of the bad quality of loans that were being included in other securitizations. In connection with the Bear Stearns Second Lien Trust 2007-1 (“BSSLT 2007- 1”) securitization, for example, one Bear Stearns executive asked whether the securitization was a “going out of business sale” and expressed a desire to “close this dog.” In another internal email, the SACO 2006-8 securitization was referred to as a “SACK OF SHIT” and a “shit breather.”

Still, the bankers led investors to believe they “had carefully evaluated – and would continue to monitor – the quality of the loans in their RMBS. In fact, Defendants systematically failed to fully evaluate the loans, largely ignored the defects that their limited review did uncover, and kept investors in the dark about both the inadequacy of their review procedures and the defects in the underlying loans.”

By 2006, Bear Stearns’ RMBS business was the largest and most profitable on Wall Street, with its 345,000 securitized loans worth $69 billion. Between 2003 and 2006, it securitized $212 billion in loans, according to the suit.

“We intend to follow up with similar actions against other sponsors and underwriters of RMBS,” an official in Schneiderman’s office told the WSJ.

JP Morgan Chase CEO Jamie Dimon held a conference call today to announce the bank’s latest earnings and address the mounting losses from the so-called “London Whale” trade. So far, the bank’s losses from that trade total nearly $6 billion, and could be headed north to $9 billion.

During the call, one analyst asked Dimon whether the failed trade — which was originated from a trading desk that was supposed to help the company reduce risk — shows that JP Morgan is simply too big to manage. Dimon, of course, said, “no“:

During the Q&A portion Mike Mayo, an analyst with CLSA, asked Dimon about Too Big To Fail “I’m wondering if the firm as a whole has reached some sort of tipping point in terms of size or complexity that makes it more difficult to manage,” Mayo asked.

Dimon replied, “No”

Mayo probed Dimon with “Have you lost a step?” The crowd on the conference call laughs and someone shouts out “Are you too old?”

Dimon will have none of it, saying “Mike, this company is the same company went from ’06, ’07, 2010, 2011, Bear Stearns, while Mike, we had a record last year.”

Many financial experts, however, disagree. “I think it does underscore that even with very good management these institutions are just too big to manage,” said former Federal Deposit Insurance Corp. Chair Sheila Bair. “Such banks have become too large and complex for management to control what is going on,” added economist and big bank critic Simon Johnson. “The regulators also have no idea about what is going on. Attempts to oversee these banks in a sophisticated and nuanced way are not working.”

As Sen. Sherrod Brown (D-OH) said during an interview with ThinkProgress, “these banks are not just too big to fail, they’re too big to manage…I think these banks will be stronger and healthier and probably more profitable if they’re smaller.” However, Dimon clearly doesn’t see it that way, and has done everything he can to ensure that regulations restricting risky trading by the biggest banks get watered down.