Joe Lewis, a collector who once owned stake in Christie’s, was indicted in New York on Wednesday on charges of insider trading. Lewis, along with of his private pilots who allegedly worked with Lewis on illegal deals, were arrested today and now face the possibility of prison time.
The indictment accuses Lewis and the two pilots, Patrick O’Connor and Bryan “Marty” Waugh, of having used information that was not public to their benefit when offering stock tips between 2019 and 2021.
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Lewis, who formerly appeared on the ARTnews Top 200 Collectors list, is known within the art world for his collection and for having once held a 30 percent stake in Christie’s during the 1990s when it was still a publicly traded company on the London Stock Exchange. François Pinault, who currently owns Christie’s, bought those shares from Lewis in 1998 before taking the company private.
Born in England and long based in the Bahamas, Lewis is believed to have amassed a collection rich in Impressionist art. In 2015, Der Standard reported that Lewis bought a $39 million Gustav Klimt painting at Sotheby’s and then put it on view in his yacht, Aviva. Bloomberg has reported that Lewis’s collection, which is also believed to include works by Pablo Picasso and Edgar Degas, is worth $1 billion. He also owns the Arthur Di Modica sculpture Charging Bull, currently on view near Wall Street in Lower Manhattan, where it has become popular with tourists.
More recently, Lewis’s art dealings have come under scrutiny. The Guardian ran an investigation into how Lewis purchased the Ganz collection and then sold it at Christie’s, basing the findings on what appeared in the Panama Papers. The publication determined that Lewis, through an offshore company whose bank account he reportedly controlled, had bought the works in it in 1997, while he still had stake in the auction house, and then contracted them to Christie’s the same day. When it sold at Christie’s in 1997, the Ganz collection brought in a total of $206 million, then a record for a single-owner sale.
Wednesday’s indictment did not focus on Lewis’s forays into the art market, however, instead directing its attention toward how he how utilized information gained from employees at companies in which he was invested.
According to the indictment, Lewis, the principal owner of the private investment company Tavistock Group, had “deputized employees to serve on various company boards” and then effectively relied on them as sources. It accuses Lewis of having learned about private information, including “upcoming favorable test results for biochemical companies,” and then having “misused and misappropriated this confidential information to provide stock tips to various individuals in his life, including his employees, romantic partners, and friends, as a way to provide them with compensation and gifts.”
The indictment alleges that Lewis falsely represented how much stake he owned in the pharmaceutical company Mirati Therapeutics. He seems to have truly owned 19.99 percent of the company via “an elaborate array of shell companies and other entities, including an offshore trust purportedly for the benefit of his granddaughter.”
O’Connor and Waugh allegedly became involved when Lewis gave them $500,000 loans each to buy a company’s stock ahead of the release of “favorable test results.” They are accused of having done so and having earned a profit as a result.
US attorney Damian Williams said in a statement, “Joe Lewis is a wealthy man, but as we allege, he used inside information as a way to compensate his employees or to shower gifts on his friends and lovers. That’s classic corporate corruption. It’s cheating. And it’s against the law—laws that apply to everyone, no matter who you are.“
Lewis also currently owns Tottenham Hotspur, an English soccer club, and was an investor in Bear Stearns ahead of the 2008 financial crisis.
Source: artnews.com