Former Sotheby's president plans guilty plea

In this story: Rate-fixing conspiracy Civil settlement RELATED STORIES, SITES

NEW YORK (Reuters) -- Sotheby's Holdings Inc. and former president and chief executive Diana Brooks Thursday said in court they planned to plead guilty to antitrust charges alleging their criminal involvement in a price-fixing conspiracy with rival auction house Christie's.

The defendants, who appeared before U.S. Magistrate Judge Nathaniel Fox in federal court in Manhattan, were assigned to separate trial judges and their pleas were scheduled to take place later Thursday.

Sotheby's released a statement saying it acknowledges its responsibility for Brooks' conduct and that the auction house has agreed to pay a $45 million criminal fine over a five-year period.

"The behavior that led to today's plea was wrong and is unacceptable," said William Ruprecht, president and chief executive officer of Sotheby's. "On behalf of Sotheby's, I apologize to our clients for this breach of the standards of trust that they have the right to expect from us and assure them that no member of Sotheby's current management played any role whatsoever in these events or was aware at any time that they were taking place."

Brooks, 50, appeared calm and poised during the magistrate's hearing and was released on her own recognizance. She is scheduled to appear before U.S. District Judge Richard Berman late Thursday afternoon to enter her guilty plea.

According to complaints filed by the Department of Justice, both Brooks and Sotheby's are charged with one antitrust count alleging that from April 1993 through December 1999 they and others conspired to suppress competition by fixing auction commission rates charged to sellers.

Auction houses generally accept goods on consignment from individuals and entities for sale at auctions. As payment for services, buyers and sellers make payments to the auction houses. The sellers' payments are generally known as commissions and are a percentage of the sale price of the goods sold at auction houses.

During the period covered by the charges, Sotheby's revenues from sellers' commissions were in excess of $225 million in the United States, the charges state.

The charges accuse Sotheby's and Brooks of agreeing to raise pricing by fixing sellers' commissions; publishing non-negotiable sellers' commission schedules and agreeing to the order in which each co-conspirator would publish its non-negotiable sellers' commission schedule.

The defendants are also charged with exchanging customer information in order to monitor and enforce adherence to the commission schedules.

Late last month both Christies' and Sotheby's boards approved a $512 million settlement of civil claims by art buyers and sellers that the auction houses colluded on prices. The criminal fine will be in addition to that amount.

Brooks' lawyer John Siffert told reporters after the arraignment that his client is cooperating with the government in its three-year criminal probe that has shaken the multibillion-dollar art auction industry.

Siffert gave no further details however published reports state that she has agreed to be a witness against her longtime boss, Sotheby's former chairman A. Alfred Taubman, the multimillionaire Detroit shopping center developer.

Copyright 2000 Reuters. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.

Auction houses say spring sales unhurt by scandal
May 12, 2000

Sotheby's
Christie's

Note: Pages will open in a new browser window

External sites are not endorsed by CNN Interactive.