Under Fire, Hedge-Fund Billionaire to Sell Choice Art
Steven A. Cohen to Sell Works at Sotheby’s and Christie’s
In the two decades that the hedge fund billionaire Steven A. Cohen has collected art, he has been not only a high-profile buyer but also a high-profile seller, disposing of a painting one season, a sculpture the next.
Andy Warhol’s “Liz #1,†1963.
Steven A. Cohen
“A. B. Courbet,†a canvas by Gerhard Richter.
But Mr. Cohen is now parting with about $80 million worth of blue-chip art at the important auctions that begin next week at Sotheby’s and Christie’s. It is the largest single group of artworks he has sold at one time and includes top examples of paintings and sculptures by Brice Marden, Rudolf Stingel and Cy Twombly, along with previously reported Warhols and a Gerhard Richter.
“We’re in a robust market, and we are actively managing the collection,†said Sandy Heller, his longtime art adviser.
The sales come just as Mr. Cohen’s fund, SAC Capital Advisors, has reached a deal with the government to plead guilty to securities fraud as part of the criminal prosecution of the firm, according to a person briefed on the case, who spoke anonymously because he not authorized to discuss the case. Prosecutors have not brought criminal charges against Mr. Cohen, but federal regulators filed a lawsuit accusing him of failing to supervise his employees and turning a blind eye to insider trading at his firm. In July, the United States attorney’s office in Manhattan brought insider trading charges against SAC, calling it “a magnet for market cheaters.†Six former SAC employees have pleaded guilty to illegal trading while at the fund.
Lawyers for SAC and federal prosecutors are putting the final touches on a settlement that, in addition to the guilty plea, will include an agreement for the fund to stop managing money for clients as well as to pay penalties of about $1.2 billion. Combined with $616 million in government fines assessed this year in two related civil cases, SAC will have paid penalties of more than $1.8 billion. Because Mr. Cohen owns 100 percent of SAC, that money will effectively come out of his pocket.
People close to Mr. Cohen, who were not authorized to speak, say that the art sales from his fabled collection are not an effort to raise money for his mounting fines and legal fees. Even after his fines are paid, Mr. Cohen will still have billions of dollars in the bank.
Ever the trader, Mr. Cohen is also taking advantage of today’s active art market where new collectors will often pay far more for artworks than they are worth.
As an opportunistic seller, he is in good company. Among this season’s high-profile sellers are the newsprint magnate Peter Brant, Eric Clapton and the New York financier Donald L. Bryant Jr.
Officials at Sotheby’s and Christie’s declined to comment about Mr. Cohen’s consignments, citing confidentiality. Jonathan Gasthalter, a spokesman for SAC and Mr. Cohen, declined to comment. But details emerged late last month that he is selling three works at Sotheby’s on Nov. 13: a 1986 abstract canvas by Gerhard Richter and two Warhols, both from 1963: “Liz #1 (Early Colored Liz)†and “5 Deaths on Turquoise†from the artist’s celebrated “Death and Disaster†series.
The Richter, which Mr. Cohen bought from the Pace Gallery in 2012 for around $20 million, is now estimated to fetch $15 million to $20 million. Both Warhols belonged to the legendary dealer Ileana Sonnabend for decades. The Warhols are expected to bring a combined total of as much as $40 million.
In addition to those marquee works, Mr. Cohen is selling about a dozen other pieces, mostly at Sotheby’s, that he acquired in recent years at art fairs and auctions. He is not parting with his most valuable paintings, like “Le Rêve†by Picasso, bought from the casino owner Stephen A. Wynn for $155 million in March, or any of his de Koonings, including “Woman III,†bought from David Geffen in 2006 for about $137.5 million. The works for sale are less expensive, representing a fraction of his holdings.
One gem coming up at Sotheby’s is “The Attended†(1996-99), by Brice Marden, a reference to pottery figures placed in Chinese tombs to accompany the dead in the afterlife. Mr. Cohen acquired the work, estimated to sell for $7 million to $10 million, from the Matthew Marks Gallery in Manhattan for an undisclosed price. Other top works include a 2010 self-portrait by Rudolf Stingel, expected to go for $3 million to $5 million, and a 2009 bronze sculpture by Cy Twombly estimated at $2 million to $3 million; both were purchased from Larry Gagosian.
“Atlantic Side,†a 1960-61 painting by Joan Mitchell bought in 2007 at Christie’s, is also for sale with an estimate of $5 million to $7 million. The Nov. 13 Sotheby’s contemporary art catalog indicates that Mr. Cohen is receiving a guarantee â€" an undisclosed sum of money â€" for some of the more expensive works, regardless of whether the auction house is able to sell them.
While Mr. Cohen has some negotiating power over auction houses competing to sell his collection, he has had little leverage in his talks with the government. An entity like SAC can be held responsible for the acts of its employees, and the six former SAC traders who pleaded guilty would likely have testified at trial that they committed insider trading while working for Mr. Cohen.
Such testimony would have made it difficult for SAC to defend itself at trial.
A version of this article appears in print on October 31, 2013, on page C1 of the New York edition with the headline: Under Fire, Hedge-Fund Billionaire to Sell Choice Art.
