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Issue #35  11/7/2001
 
Taubman, Sotheby's Former Chairman, Goes On Trial On Nov. 8th For Price Fixing

Former Sotheby's chairman Alfred Taubman is scheduled to go on trial in New York for price fixing in regards to sellers' commissions beginning today, Thursday, November 8, when jury selection begins.

Reportedly prosecutors with the Justice Department's antitrust division are relying on the testimony of former Sotheby's president and CEO Diana Brooks and Christie's executive Christopher Davidge to make the case that Taubman was a primary force behind a conspiracy to fix sellers' commissions. The department said the two auction houses engaged in a six-year conspiracy and overcharged US sellers hundreds of millions of dollars in commissions.

The Justice Department's lead prosecutor James J. Greene claims that Brooks

could not have orchestrated the conspiracy without involvement of Taubman. Greene further contends that Taubman colluded with Christie's former chairman Sir Anthony Tenant during a series of secret conversations, and then both men left the details to their subordinates. Tenant was indicted along with Taubman last May, but he remains in the UK, which does not allow for extradition in such cases. It has been reported that Tenant has said that he will avoid the US in the future and has thus far refused to cooperate in the case.

Brooks and Davidge are expected to testify that they were just following up on their superiors' earlier actions when they implemented the price-fixing scheme.

In a motion just last month, Taubman's attorneys asked federal Judge George Daniels of the U.S. District Court for the Southern District of New York to suppress Davidge's testimony. Taubman's lawyers claimed that payments by Christie's for a severance package to Davidge violated the New York Lawyer's Code of Professional Responsibility Rule 7-109(c) because they amounted to paying for testimony.

Taubman's lawyers lost on the motion. However, while Judge Daniels refused to suppress the testimony, he also ruled that Taubman's lawyers could cross-examine Davidge about the severance agreement.

Other evidence in the case includes unsigned memos allegedly in the handwriting of Tenant, including a memo he wrote to Davidge, allegedly as a follow-up to a conversation with Taubman, in which he is said by prosecutors to tell Davidge to cooperate with Brooks.

Taubman faces a maximum of three years in prison and a $350,000 fine if he is convicted. The trial is expected to take well over a month.