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from Financial Regulatory Forum:

Swiss authorities investigate bribery accusation in UBS tax case

By Oliver Hirt and Sven Egenter ZURICH, July 29 (Reuters) - Swiss prosecutors said on Wednesday they are investigating allegations that an unnamed high-ranking Swiss official took a bribe from a U.S. client of UBS to help cover up tax fraud.

Federal prosecutors said in a statement the tax authority had filed charges against unknown persons which it was now investigating, without giving further details.

A U.S. client of the Swiss bank, which is at the centre of a U.S. tax fraud case, pleaded guilty on Tuesday to using Swiss bank accounts to hide money from the U.S. taxman and said he paid a Swiss official $45,000 to help cover up the fraud.

Swiss Finance Minister Hans-Rudolf Merz, who also holds the country's rotating presidency, said the investigation should help clear up whether the allegations were "rumour or reality".

"We don't believe that this has happened but the testimony is so serious that we immediately got the law involved and we will let this be cleared up by the judiciary," Merz told Swiss television.

Corruption is virtually unheard of in Switzerland, which is ranked as one of the five least corrupt countries in the world by Transparency International.