What's the Penalty When the Market Doesn't Police Itself?

Chowaiki Gets Sentenced, Jho Low's Story Optioned for the Movies, + Christie's PWC Mid-Season Makes $20.1m

Christie’s mid-season Post-War and Contemporary art sale in New York made $20.1m, a 25% rise from the total the year before. That’s also double the level of sales two and three years ago when the totals for these sales bottomed out against the backdrop of a supposed market contraction.

Expectations at the top of these sales are hard to outpace. So the Richard Prince and Helen Frankenthaler works that led the sale made a prices below the low estimates on a hammer basis. But Kaws made another strong showing with a six-part work, Kimpsons, that sold for $516,500 over a $200k high estimate. Not all of his works outperformed though. Nor were the upside surprises confined to Contemporary names. Willem de Kooning’s small work on vellum laid on canvas topped the $350k high estimate to make $468,500. Louise Nevelson’s Maquette for White Vertical Water hit $432k over a $150k high estimate.

Cecily Brown’s untitled tiny work also saw competitive bidding that drove it to $348,500 above the $250k high estimate. Wojciech Fangor’s M 24, above, doubled the high estimate to make $250k. Sam Gilliam saw continued success with Stage Middle making $225k over a $150k high estimate. A Friedel Dzubas work, Florentine, also got bid up to $150k over a $60k high estimate.

PAD London Opens Monday

Repetto UK will have this Giorgio Morandi etching (73/75 + 3AP) from 1928 at their booth (A22) at PAD London in Berkeley Square October 1st to 7th. Although we now think of him as a painter, Morandi was a professor of etching for 26 years and created 133 etchings during his career.

This is PAD’s 12th year in London. Now there are outposts in Geneva and will soon be one in Monaco this Spring. In the meantime, PAD London has 68 galleries showing design, decorative arts, antiquities, tribal art and collectible jewelry, 10 of these exhibitors are new, including Achille Salvagni (London), Veta Stefanidou Tsoukala (Athens), 18 Davies Street (London), Karen Swami (Paris), and Robert Zehil (Monaco) in the fields of design and decorative arts; Hélène Bailly (Paris) in the field of 20th century art; Walid Akkad (Paris), Lorenz Bäumer (Paris), Valery Demure (London) and G by Glenn Spiro (London) in the field of collectible jewellery.

Teiger’s Offer that Sotheby’s Couldn’t Refuse

Auction houses jump through some incredible hoops to land the big consignments. Take Sotheby’s Teiger Collection on offer in London next week. Astute observers have noticed that a John Currin painting, Minerva (Lot 13) is being offered with an unfamiliar symbol which denotes there is someone with the right of first refusal.

This awkward arrangement comes from the late collector who had made an unconventional deal when he bought two works years ago. David Teiger gave the seller the right of first refusal should the works ever come back to market. Even though Tieger is no longer with us, his heirs wanted to honor the bargain.

That put Sotheby’s in the awkward position of creating the right of first refusal for the Currin (and another day sale lot.) That means the holder of the right will bid like any other party when the lot comes up for sale. Should the “the holder” place the final, winning bid, the holder will be charged the underbidder’s bid price and premium.

Now, before the auction scolds start decrying the end of Western Civilization and pronouncing another victory for inequality, it is very doubtful you will ever see this arrangement again. A right of first refusal gives the auction house no advantage or benefit. It’s simply an accommodation to the seller.

The existence of the right is likely to turn off potential bidders who will know that no matter how far they stretch for the work, it may be snatched from them by a bidder who gets the extraordinary right to simply match their top bid.

And, yes, Sotheby’s will report the price the winning bidder actually pays if the holder bids more in the room but pays the underbidder’s price.

Jho Low is now the “Asian Gatsby”

In a stretch, the Hollywood high concept for a movie based upon Jho Low and the 1MDB saga has been bought as the Asian Gatsby, according to the South China Morning Post:

  • Crazy Rich Asians star Michelle Yeoh has signed on to produce the coming film adaptation of the best-selling book Billion Dollar Whale: The Man Who Fooled Wall Street, Hollywood, and the World, a fascinating book about the inner wheelings and dealings of Malaysian fugitive businessman Jho Low and the 1Malaysia Development Berhad (1MDB) scandal.

Will Chowaiki Suffer Enough?

Ezra Chowaiki was sentenced to 18 months in prison and ordered to pay $12.9m in restitution by Judge Jed Rakoff yesterday, Bloomberg reported yesterday. Chowiaki, who defrauded clients, had already forfeited 25 paintings worth $16m, many with disputed ownership claims.

Rakoff was quick to point out the crime’s particular threat to the self-policing art market:

"One factor that does loom in this case is the seemingly and largely unregulated nature of the art market," he said. "Here, we have something that by its very nature calls for expertise and can easily be the subject of fraud, yet seems to operate without any meaningful constraints. I think that weighs modestly in favor of a higher sentence."

Lawyers for some of Chowaiki’s victims were more impressed with Rakoff’s leniency in the matter. “Chowaiki admittedly defrauded dozens of victims out of millions of dollars,” attorney Judd Grossman said. “Many of these victims—a large number of whom may recover only pennies on the dollar when all is said and done—believe the sentence was quite lenient.”

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