Thursday, June 11, 2009

In the eyes of the Beholder....

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: :)

1 comment:

  1. Yes, I believe that insider trading does exist and is detrimental to the art world. Anytime there are goods or services exchanged in financial terms, the threat of such a beast exists.

    However it would be a very fine line to work in determining what is insider trading and what is not. How much can someone say about an artist without disclosing too much of his/her biography (thus tying the work to some kind of mental condition that might may those works more favorable) OR sharing information about who is collecting artist XYZ to make other collectors look more favorably at that artist's work....It's helpful, from the buyer's point of view, be/c he/she may want to know what's hot, but it can drive up a price unfairly (in comparison to other works by other, similarly skilled artists).

    Put simply, it exists, but I don't know what to do about it. Great question, Allie.