"This case is not about HSBC complicity in money laundering. Rather, it's about lax compliance standards that fell short of regulators' expectations and our expectations, and we are absolutely committed to remedying what went wrong and learning from it," the spokesman said in a statement.
In July, the U.S. Senate Permanent Subcommittee on Investigations said that between 2001 and 2010, the bank "exposed the U.S. financial system to money laundering and terrorist financing risks."
Federal and state prosecutors are now looking into the matter, The New York Times reported Saturday.
The bank is one of several foreign banks suspected of dealing with either sanctioned foreign banks or accepting bulk cash deposits from Mexican drug cartels.
Some of the banks have moved funds from questionable sources through U.S. subsidiaries, the Times reported.
HSBC has set aside $700 million in anticipation of a settlement with prosecutors. Other banks suspected of money laundering include Germany's Deutsche Bank and Commerzbank, France's BNP Paribas and Credit Agricole of France and Britain's Royal Bank of Scotland.
HSBC also said Friday, the bank "doubled global expenditure to significantly strengthen compliance as a control function."
Of the foreign banks under suspicion, HSBC is thought to be the most involved.
Reportedly, an HSBC executive was known to be in favor of the bank doing business with Al Rajhi Bank of Saudi Arabia, which had connections to terrorists.
The Senate report HSBC turned a blind eye to Mexican drug cartels. In a country "under siege from drug crime, violence and money laundering," the bank's Mexican branch was the "single largest exporter of U.S. dollars," the report said.