Sotheby's chief convicted of price-fixing

The former chairman of Sotheby’s has been convicted of conspiring with rival auction house Christie’s to fix the commissions paid by sellers of fine art.

Alfred Taubman, 76, of Bloomfield Hills, Michigan, faces up to three years in prison for conspiring to fix prices.

The jury deliberated over two days before reaching the verdict at a US District Court in New York.

Taubman had denied charges that he and former Christie’s chairman Anthony Tennant, 71, of Andover, Hampshire, stole as much as $400m in commissions from 1993 to 1999.

Between them, the businesses control more than 90% of the world’s art auctions.

The prosecution’s case centred on testimony by Diana ‘‘DeDe’’ Brooks, the former chief executive of Sotheby’s, who pleaded guilty in October 2000 to price-fixing charges.

She agreed to testify against Taubman in hopes of avoiding a three-year prison sentence.

In his closing arguments, defence lawyer Robert Fiske attacked Brooks’ credibility, calling her ‘‘a walking reasonable doubt’’.

The defence accused Brooks of single-handedly hatching the plot to fix prices on sellers’ commissions during a February 1995 meeting in the back seat of her Lexus with her Christie’s counterpart, Christopher Davidge.

Sotheby’s executives testified that Taubman was so bored by finance, he would doze off at board meetings.

‘‘We agree with the prosecution that a crime was committed,’’ Fiske told the jury. ‘‘The question for you is whether Mr Taubman had anything to do with that agreement.’’

Brooks, 51, testified that the plot had been conceived during a secret 1993 meeting in London at which Taubman and Tennant agreed they ‘‘were killing each other on the bottom line, and that it was time to do something about it.’’

During testimony, Brooks and Davidge said their bosses had ordered them to end a costly rivalry by eliminating discounts and charging identical, non-negotiable commissions.

Brooks said Taubman also warned her to keep quiet about it.

In closing arguments, prosecutor John Greene, told the jury Taubman had the means to carry out the scheme - and the motive: Sotheby’s profits plummeted from $410m in 1989 to $202m in 1992.

As chairman of the company and property mogul, Taubman ‘‘thought he was above the law,’’ Greene said.

"You don’t become a millionaire without knowing how to read the bottom line.’’

Mr Tennant has said he will not come to the United States to face charges, and the competition case is not covered by extradition treaties.

Sotheby’s pleaded guilty to conspiracy and was sentenced to pay $45m. Christie’s was granted amnesty by the government for its co-operation.

Taubman will be sentenced on April 2.