Ex-auction house chiefs indicted

A federal grand jury in New York indicted the former chairmen of Sotheby’s Holdings Inc. and Christie’s International, the world’s two largest auction houses, on price-fixing charges, the Justice Department said Wednesday, the Associated Press (AP) reported.

The indictment charges A. Alfred Taubman, former chairman at Sotheby’s, and Anthony J. Tennant, former chairman at Christie’s, with conspiring to fix auction commission rates charged to sellers in the United States and elsewhere from 1993 to 1999, the department said.

 

The department said the two auction houses engaged in a six-year conspiracy and charged U.S. sellers at least $400 million in commissions, the AP reported. They reportedly control more than 90 percent of the world’s live auctions of art works, jewelry and furniture.

 

If found guilty, Taubman and Tennant could face three years in prison and $350,000 fines. The fines could be much larger – by law they might have to pay twice the amount they gained from the crime, or twice the loss suffered by customers, if either of those amounts adds up to more than $350,000.

 

The indictment said Taubman and Tennant agreed to raise prices by fixing sellers’ commission rates, set nonnegotiable sellers’ commission schedules and exchanged customer information for the purpose of monitoring adherence to the commission schedules.

 

The Justice Department said the two undercut each other’s offers to sellers, costing sellers their principal bargaining tool.

 

“This case will show that these individuals mastered the art of price fixing,” said James A. Griffin, deputy attorney general in charge of the criminal antitrust enforcement program, the AP reported.

 

Last month a federal judge approved a $537 million settlement of price-fixing lawsuits brought by customers of Sotheby’s and Christie’s. The auction houses are sharing the cost of the settlement.

And in October 2000, Sotheby’s and its former chairman and chief executive, Diana D. Brooks, pleaded guilty to separate charges of fixing auction rates. Sotheby’s has been sentenced to pay $45 million; Brooks has not been sentenced, the Justice Department said.

 

Christie’s has been cooperating with the investigation under a leniency program that could protect the auction house from criminal prosecution if it voluntarily provides information to prosecutors.

 

The antitrust division’s New York office and the FBI in New York are handling the investigation, the AP reported.