New York Sotheby's and Christie's tentatively agreed Friday to pay $512 million to settle claims that the world's most powerful auction houses cheated buyers and sellers in a price-fixing scheme that dates back to 1992.
The proposed civil settlement, reported by lawyers but not officially announced, comes as prosecutors for the Justice Department are stepping up efforts to wind up a three-year criminal investigation into whether the two auction giants stifled competition by colluding on a host of business practices.
Although the proposed settlement, one of the largest in antitrust history, did not specify how the money would be raised, lawyers said that in addition to the auction houses themselves, the settlement could include payments from top executives including A. Alfred Taubman, the former Sotheby's chairman who is still a majority shareholder, and Diana D. Brooks, its former chief executive.
Both abruptly resigned in February and are under investigation by federal prosecutors.
Lawyers involved in the negotiations said the agreement was reached late Thursday night at the offices of Weil Gotshal & Manges, the law firm representing Sotheby's, and included Christie's counsel, Skadden Arps Slate Meagher & Flom, as well as the lead counsel representing the more than 120,000 angry buyers and sellers, Boies, Schiller & Flexner.
Michael L. Weiner of Skadden Arps declined to comment, as did a spokesman for Sotheby's and members of the Boies firm.
The agreement will not be formally announced until Judge Lewis Kaplan of the Southern District Court rules on the settlement, a decision that is expected soon.
Under the agreement the boards of both auction houses are required to vote on it by Sept. 30.