Are the Recent Gagosian Gallery Defections And Steve Cohen's Legal Troubles Related?
Damien Hirst's Shark
Last weekend brought fresh news for art world titan Larry Gagosian, all of it terrible. Not only have rumors of a planned May Jeff Koons' exhibition at rival David Zwirner gallery turned out to be true, but two of Gagosian's major artists have decamped from the famous powerhouse gallery at a time when the New York dealer may need their earning ability the most.
First it was Damien Hirst, who announced last week that he is leaving the gallery after 17 years. A day later, the artist Yayoi Kusama--she of the 2012 Whitney retrospective and recent collaboration with retailer Luis Vuitton--also disclosed she is leaving Gagosian Gallery. Neither artist divulged information about their motives.
Which brings me to Steve Cohen (No. 36 on Forbes's list of the richest Americans) and his current problems with the U.S. Securities and Exchange Commission. A major collector of expensive trophy art (he owns work by many of Gagosian's artists, including Hirst's shark in a tank for which he paid $8 million in 2004), his hedge-fund SAC Capital Advisors is currently the target of an SEC insider trading investigation. (His former portfolio manager Matthew Martoma was recently arrested for making illegal trades.) The connection? If Cohen's legal woes worsen, and they look like they will, the billionaire may have to flood the market with his incredibly expensive artworks--with a wounded Larry Gagosian having to defend their pumped up values.
Cohen's current legal and financial fiasco, Gagosian's fresh artist defections, as well as the dealer's ongoing legal worries--he is currently being sued by collector Jan Cowles in a case which many agree will lead to long awaited art market regulation--could finally signal the beginning of a market correction.
In meteorological terms, this is an ugly meeting of several storm systems. Might this be the financial Sandy of the art world?
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