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Senate Report: Lax control by Europe's biggest bank led to money laundering

A Senate investigation has found that Europe's largest bank had lax controls that allowed Mexican drug cartels to launder money through its U.S. operations for seven years.

The Senate Permanent Subcommittee on Investigations extensive report on HSBC Holdings PLC also says U.S. regulators knew that the bank had a poor system to detect problems but failed to take action.

The report also says some bank affiliates skirted U.S. government bans against financial transactions with Iran and other countries.

The panel is releasing the report ahead of a Tuesday hearing on the topic. HSBC says its executives will apologize for the lapses at the hearing and promise to fix the problems.

The U.S. Justice Department says it is conducting a criminal investigation into HSBC's operations.