Thompson in The $12 Million Stuffed Shark brings into discussion the potential existence of insider trading in the art world – a topic which we also discussed in class. Thompson particularly addresses this controversial issue in regards to a museum using donor funds to purchase art created by one of its own trustees, as well as a museum director’s purchase of art by an artist who will be part of a show that is not yet announced (discussed in more detail on page 221). In a commodities market this is considered to be illegal insider trading called “front-running”. However, the art market defends such acts by insisting that they are beneficial to all involved. Thompson does not exclude dealers or auction houses from the accusations, bringing to light the often shared information between auction houses such cliental lists and a client’s available capital. In your opinion, do you believe that insider trading does exist in the art market and if so, do you believe its presence is so detrimental to the merit of art that the participants should be fully prosecuted under the law, or do you believe they should be merely reprimanded?
Also, if you’re like me and are not totally sure what insider trading is, here is a link to a definition/description of it by our fine government: :)