07/11/2012 04:00 pm ET

HSBC To Apologize For Being Awful At Preventing Money Laundering

HSBC may be ready to say it's sorry.

The bank will apologize to a Senate panel next Tuesday for not doing more to prevent money laundering through its accounts, Bloomberg reports, citing an internal memo at HSBC. The panel has been investigating HSBC for months over claims the bank didn't do enough to prevent money laundering.

In 2003, according to Reuters, the Federal Reserve Bank of New York told HSBC to tighten up its protections against money launderers. The bank failed to do this -- at least, that's what two U.S. attorneys have alleged. One attorney, William Ihlenfeld of the Northern District of West Virginia, has accused HSBC of cooking up a "flawed sham paper-product" to give the impression that the bank was meeting regulatory requirements, when in fact it was not.

The problem of parties funneling shady money through the American banking system has been a thorn in the side of regulators for years, whether it's suspected drug traffickers sending cash through Wachovia accounts, or billions of dollars in questionable funds coming to Bank of America from parts of the world associated with terrorist activity.

Just last month, the FBI filed an affidavit claiming that a Mexican drug syndicate was cleaning its money through an American racehorse business with an account at BofA.