Troubled Swiss bank UBS today admitted it had uncovered a "limited number" of cases of tax fraud under both US and Swiss tax law.
The revelation came from the chairman, Peter Kurer, as US authorities continue to look into the tax advice UBS has given to thousands of Americans.
Kurer also told an extraordinary meeting of shareholders in Lucerne that bank secrecy was "not absolutely valid". He said bank secrecy "is not there to protect cases of tax fraud", adding: "Such an absolute pretence would only damage bank secrecy."
Switzerland and Liechtenstein are under global pressure to revise their banking secrecy laws as tax authorities clamp down on tax evasion by wealthy individuals holding accounts in both countries
Kurer's comments, in a speech long on criticism of the bank's arrogant culture in the past, suggest UBS is preparing to hand over details of clients' accounts to US authorities investigating tax fraud. But Kurer insisted UBS had not violated bank-client confidentiality.
Just two weeks ago Raoul Weil, the head of UBS's private banking operations in the US, was forced to stand down after being indicted by a federal grand jury in a tax fraud case.
The department of justice alleges that 20,000 American clients have been systematically using Swiss bank accounts to conceal $20bn (£13bn) of assets from the Internal Revenue Service.
Weil is fighting the charge and his lawyer insists that he is "a highly respected banking executive in Switzerland with an unblemished record for integrity".
The bank has begun closing down its Swiss-based private banking advice business for US cross-border customers after a senior private banking executive was found guilty in a Florida court of helping a wealthy US-based businessman to avoid taxes.
Bonuses are returned
Kurer, successfully trying to persuade angry shareholders to endorse a recent Sfr6bn (£3.2bn) cash injection from the state, told them former executives had surrendered about Sfr70m in bonuses.
These include Marcel Ospel, ex-chairman and architect of UBS's disastrous forays into complex mortgage asset-backed products, which have forced the bank to write down almost $50bn.
The Swiss central bank is now taking over $60bn of these toxic assets in the rescue plan which Kurer insisted was "not money down the drain".
Peter Wuffli, the former chief executive, has already paid back Sfr12m while Ospel and two colleagues, including the former chief financial officer, Marco Suter, have waived Sfr33m. Other anonymous former executives have waived an additional Sfr22m in salaries and bonuses.
Kurer, however, said there was no actual or legal evidence for bringing successful lawsuits against former or present senior executives. The issue is still being investigated by an independent board committee.
Kurer, who has given up his own annual bonus in a revamped executive remuneration system, won backing from 98.5% of investors for both the rescue plan and the new remuneration model.