Sotheby's US Bosses Quit; Bid to Prove Auction Price-Fixing

Article excerpt

Auction house Sotheby's said its chairman and president have resigned under pressure to resolve a US Department of Justice investigation into alleged price-fixing.

Mr Alfred Taubman stepped down as chairman of Sotheby's Holdings Inc and will be replaced by former Columbia University president Mr Michael Sovern, the auction house's board of directors said yesterday.

Mr Taubman, who bought the company in 1983, retains his controlling interest and a seat on its board.

"While this is not an easy decision for me, I have determined that it is time for me to step down from my role as chairman," Mr Taubman said.

Ms Diana Brooks will be replaced as president and chief executive officer by Mr William Ruprecht, who has been managing director of Sotheby's in North and South America since 1994.

"My decision is a very difficult one, but I have taken it in the best interests of the company and of my colleagues," Ms Brooks said.

In 1997, the Justice Department began an investigation into auction houses including Sotheby's and its main rival, Christie's, focusing on alleged price-fixing in the commissions paid to sellers.

In 1995, Christie's replaced its long-standing ten per cent commission to sellers with a sliding scale of two to ten per cent, and Sotheby's soon adopted a similar policy.

The Sherman Antitrust Act prohibits collusion in such arrangements as illegal restraint of trade, punishable by fines and imprisonment.

Sotheby's has also been hit with several civil lawsuits from clients claiming collusion between the two auction houses and complaints from shareholders alleging failure to disclose the alleged agreements and their impact on Sotheby's financial conditions.

Sotheby's said that it "has recently met with the Department of Justice in order to discuss a prompt and appropriate resolution of this investigation, which will allow the company to put this difficult matter behind it". …