When you only hear one side of the story (the US Government's side) it's easy to make a case that sounds damning.

Firstly, it's not like people were turning up at banks with boxes helpfully labelled "DRUG MONEY". The point of money laundering is you have a reasonable explanation for where the cash is coming from. In this case the alledged cartel money was actually from companies that processed remittances. It's not entirely surprising if such companies move large amounts of cash. And having such boxes (probably provided by the bank themselves) would make a lot of sense for any bank with cash heavy clients.

But moreover the US never managed to prove the money actually did come from cartels. Their case amounted to: there's lots of cash moving from Mexico to the USA via HSBC. It must obviously contain drug money. Therefore HSBC is guilty.

There was also a sideshow related to transactions with Iran, caused by the fact that the USA was trying to impose sanctions on Iran globally but many of HSBCs international clients are not (theoretically) under US jurisdiction. Congress took a very strong "you're either with us or against us" line on this and banks (many of them, not just HSBC) got caught in the crossfire.

The fact is that AML laws are so terrible every bank is guilty of violating them. You really cannot run a large bank without having some criminal clients and post PATRIOT Act, that's enough.