Contemporary Art

The Art Market – A Criminal’s Paradise

Posted November 18th, 2013

Art Market, Business, Contemporary Art

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Michael Wolff writes at USA Today: “It is nearly commonplace among art professionals that art, perhaps second only to drug trafficking, is among the world’s most lucrative dubious business. It is hard to overlook the connections between these two cash-rich enterprises.

Art is, too, a business of finance.

Many of the most prominent figures at the auctions are men whose primary interest is not art, or the art market, but financial markets. This includes Dan Loeb, the billionaire corporate raider who buys stakes in companies and, using a variety of market strategies, moves up the price and then sells his stake — the basic model for high-end art dealing.

Steven Cohen, one of the world’s leading art buyers, runs an investment firm, SAC Capital that pleaded guilty last week in the largest insider trading case in history. Cohen, who personally paid a fine of $1.8 billion, was a significant seller in last week’s auctions, putting $88 million worth of art on the block.

The fact that financial trading is the business of so many new collectors, and that the international art market now provides a viable and ever more liquid alternative currency, one that is almost entirely unregulated, ought to suggest a reason for their interest. But curiously, Cohen and Loeb tend to be most often cast as victims of the art world, seduced by its status and social benefits, rather then predators in it.

Still, at least their interest is public.

A distinguishing feature of a big art auction is the extraordinary measures many bidders take to hide their identities. In a world where the rich most often want to proclaim themselves ever more loudly, in which art itself is supposed to be of value precisely because it identifies you as both rich and cultured, neither the sellers nor the buyers of the Bacon and Warhol works were revealed.

Why?

Not unlikely, for all the reasons it is better that people don’t know you’ve just moved an indecent amount of money.”

Read the whole article here…

Photo: Christie’s Images Ltd. via AP)