ZURICH (Reuters) - UBS AG will not sue its former bosses after risky bets on sub-prime mortgages and a strategy of helping US clients dodge taxes by hiding money in secret accounts brought the Swiss bank to its knees.

Zurich state prosecutors also said they would not open criminal proceedings against UBS employees as there was no evidence of a breach of Swiss law.

UBS said bringing charges would only draw negative attention as the wealth management group seeks a fresh start to win back trust after massive withdrawals by rich clients.

"The board has decided that years of uncertainty about these matters due to litigation ... and related negative attention from such action is not in the interest of UBS, its employees, clients and shareholders," the group said in a statement.

UBS said the board had decided not to take action after a thorough review, including consultation with external legal experts. It said its new management led by banking veteran Oswald Gruebel had taken "comprehensive and profound measures to ensure that nothing like this should ever happen again".

Earlier this year, The world's No. 2 wealth manager, with $1.7 trillion in assets and the leader in the super-wealthy sector, appointed Gruebel as chief executive and Kaspar Villiger as new chairman to try to turn the page.

Public anger over UBS's problems has focused on former chairman Marcel Ospel, who quit in April 2008 after being blamed for the aggressive risk-taking strategy in the United States which brought the Swiss bank near to collapse.