Bank Frey, a Swiss private bank under investigation for allegedly helping Americans evade taxes, is shutting its doors after the recent US crackdown on the Alpine state.

Zurich-based Bank Frey & Co said in a statement that its shareholders had opted for the bank to cease operations because tighter regulation on banks accepting US clients had made regulatory costs unsustainable.

“The decision stems from the increasingly difficult market conditions, ever-growing regulations and the unsustainable requirements that smaller private banks are required to comply with, in part as a result of the tax dispute with the USA,” the firm said.

Switzerland's banking sector has come under intense scrutiny from US authorities seeking to crack down on tax evasion because of the country's banking secrecy laws. Pressure from the US and several European neighbors has forced Switzerland to make compromises and help foreign authorities track down hidden assets.

Bank Frey stressed that it has not been charged with any wrongdoing and as such is not considered a target by the US authorities.

However, Bank Frey is one of 14 Swiss banks currently under investigation by the US Department of Justice for helping Americans evade taxes through the use of undeclared accounts. Others in the group include Credit Suisse Group and Julius Baer.

In its statement, Bank Frey said that it has “acted cooperatively within the framework of both Swiss and United States law and intends to continue to do so.”  It also affirmed that the bank is currently “financially healthy and will not be liquidated.”

Bank Frey has declined to comment any further on the imminent closure, but Markus Frey concluded in the bank’s statement that in Switzerland “it no longer makes sense for a small bank to continue its cross-border services”.

The bank is not the first Swiss private bank to cease operations after the US began investigating its operations. Wegelin & Co., once Switzerland's oldest bank, shut its doors earlier this year after being indicted by the US and consequently pleading guilty to helping Americans avoid paying taxes.

While no charges have been filed against Bank Frey, US authorities have indicted Stefan Buck, the bank's former head of private banking, for aiding tax evasion. Edgar Paltzer, an attorney at Swiss law firm Niederer Kraft & Frey, where Bank Frey founder Markus Frey served as a partner, was named in the same indictment. Paltzer consequently pleaded guilty to a single count of conspiracy and is scheduled for sentencing next year.